Brexit News & Discussion v6: EU Leaders Go to Battle Over Plugging Post-Brexit Budget Gap

[Arkain2K]

The day after the European Union’s chief negotiator warned that there could be no special deal for Britain’s finance sector, the U.K. sent a message back: You need our banks as much as they need you.

“The City of London is actually the banker for Europe,” Prime Minister Theresa May told a parliamentary committee on Wednesday. “It’s a significant provider of capital finance for Europe. There will be greater recognition of the role that the City plays.”

Bank of England Governor Mark Carney used almost exactly the same words during his own questions session in Parliament a couple of hours earlier. He said London handled “the most complicated bits of finance, the wholesale markets, the equity underwriting, the derivatives, FX trading.” The British regulatory system meant it was well equipped to do that business, he said.

The future of banking after Britain leaves the EU is one of the biggest questions in the Brexit talks. Finance is a significant U.K. industry, and a deal that prevented British banks from continuing to operate in the EU could see jobs move overseas. EU negotiator Michel Barnier told journalists this week that financial services couldn’t be included in a trade agreement. Such a deal, he said, would be unprecedented.

Carney argued that was too negative a position. “I don’t accept the argument that just because it has not been done in the past, it can’t be done in the future,” he said. “We’d just walk away from progress if that were the approach we took to issues.”

 

[Arkain2K]

 

[Arkain2K]

The British territory of Gibraltar attacked the European Union for the “shameful” treatment of its citizens in Brexit negotiations on Friday, in an escalating dispute that threatens to derail the talks.

Deputy Chief Minister of Gibraltar Joseph Garcia accused Spain of seeking to use Brexit to advance its 300 year-old claim to the 2.6 square miles (6.7 square kilometers) of U.K. territory on the southern tip of the Iberian peninsula. Garcia attacked the EU for “totally unacceptable” discrimination against its pro-European people.

Under EU negotiating guidelines, a separate two-year transition phase for Gibraltar will need to be negotiated directly between the governments in London and Madrid. British officials fear Spain will threaten to veto efforts to strike the Brexit transition deal that businesses want if Theresa May refuses to negotiate that separate deal to cover the disputed territory.

“For us, the view that Brussels has put forward is totally unacceptable,” Garcia said in an interview with Bloomberg TV on Friday. “It is shameful that these pro-European people in Gibraltar should be treated by the European Union in this way.”

 

[Arkain2K]

 

[Arkain2K]

The European Union plans to plug a potential Brexit loophole by bringing the biggest investment firms in the euro area under European Central Bank supervision.

Under a bill proposed on Wednesday by the European Commission, the EU’s executive arm, the ECB would assume oversight of companies classified as “systemic,” while smaller firms would become subject to a new regime that’s better tailored to their activities. The larger firms are mostly units of major investment banks.

“Smaller investment firms will benefit from simpler requirements which are more in line with their risk profile,” Valdis Dombrovskis, the EU commissioner in charge of financial-services policy, said in a statement. “At the same time, larger firms posing similar risks as banks should be regulated and supervised like banks.”

Euro Area

“In the U.K., large and systemic broker-dealers are supervised exactly like banks,” Nouy said earlier this year. “This is what we need in the euro area as well.” The European Banking Authority has also said that large investment firms in the euro area should be supervised by the ECB.

Broker-dealers trade securities for their own account or on behalf of other firms. When they trade for their own account, they act as dealers; when they trade for other customers, they act as brokers.

The EU’s biggest investment firms are concentrated in the U.K., but are in the process of shifting operations to the rest of the bloc to retain market access after Brexit, the commission said.

As of December 2016, the BOE’s Prudential Regulation Authority regulated investment firms including Morgan Stanley & Co. International Plc, Citigroup Global Markets Ltd. and Barclays Capital Securities Ltd. If these firms operate in the euro area, they could potentially come under ECB oversight if they clear an asset threshold, according to the bill. If they already have a banking license in the euro area, little would change for them.

Investment firms are currently covered by parts of the EU’s prudential rules for banks as well as by securities laws, and are supervised at the national level. That’s prompted warnings from Daniele Nouy, head of supervision at the ECB, that big U.K.-based broker-dealers and other firms may choose their new EU headquarters based on the most attractive supervisory regime, creating the threat of a regulatory “race to the bottom.”

 

[Arkain2K]

 

[Arkain2K]

U.K. Prime Minister Theresa May used to say she wanted a customized, "bespoke" trading relationship for Britain once it leaves the European Union. That was before she, and her negotiating hand, were weakened by the results of a snap election that backfired. Now May might have to soften her approach to Brexit by agreeing to maintain more ties to the EU’s trading bloc than she previously anticipated. If a bespoke deal is now a stretch, Norway’s relationship with the EU might be back on the table as a model.

 

[GSP_37]

I can't help think the Brexit vote was also influenced by the troll farm.

 

[Arkain2K]

 

[Arkain2K]

 

[Arkain2K]

 

[Arkain2K]

 

[Arkain2K]

 

[Arkain2K]

The European Union can’t pick and choose which bits of its economic relationship with Britain it maintains and which it eliminates in any future trade deal, U.K. Brexit Secretary David Davis said, throwing the words of EU diplomats back at them.

Post-Brexit trade talks are due to start in March, with a year remaining until Britain’s scheduled exit day in 2019. Writing in Tuesday’s Daily Telegraph, Davis described the discussions as “a deep and open exploratory dialogue to discover a new, mutually acceptable point of balance in our relationship.”

“The final deal should, among other things, cover goods, agriculture and services, including financial services, and be supported by continued intelligent cooperation in highly-regulated areas such as transportation, energy and data,” Davis wrote. “A deal which took in some areas of our economic relationship but not others would be, in the favored phrase of EU diplomats, cherry picking.”

couldn’t be included in a deal with Britain because no previous EU trade agreement with other countries had such provisions. U.K. envoys are determined to defend the interests of financial and professional services, an industry that the lobby group TheCityUK estimates contributes nearly 11 percent of economic output.

 

[Arkain2K]

Prime Minister Theresa May believes Michel Barnier is bluffing when he says there will be no special deal for financial services, officials said, as the U.K. prepares to negotiate its post-Brexit ties with the European Union.

Two senior officials familiar with the matter privately think the EU’s chief Brexit negotiator is faking a hard-line stance in ruling out a deal that would allow banks to continue operating freely across the bloc.

Talks have yet to start on Britain’s future trade agreement with the EU but Barnier said last month there was no chance of a deal that replicated the easy access that U.K.-based financial services currently enjoy to the single market.

The U.K. officials said the French former commissioner was simply setting out an opening position that did not have backing from the 27 other EU member countries. They said banks based in London will be fine because businesses operating in the EU will need to maintain access to finance after Brexit.

The fate of London’s financial district is urgent for May, who last month agreed to pay a 39-billion-pound ($53 billion) bill to start talks on the nuts and bolts of a transition. With Britain’s departure from the bloc just 14 months away, businesses are counting on a two-year adjustment period.

 

[Arkain2K]

French President Emmanuel Macron urged fellow European leaders to maintain their unified stance as the Brexit talks move on to phase two, warning of the dangers of each pursuing their own interests.

Leaders of the EU-27 last month gave the green light for discussions to progress to the second phase -- negotiations on a future trade deal between the U.K. and the EU, after hammering out the outline of a deal on Britain’s divorce from the bloc. Asked by the Daily Telegraph how the talks were going, Macron said the EU would maintain its unified approach of seeking a common negotiating mandate.

“This is the right method as it avoids divisions and once again allows us to preserve the collective interest," Macron said late Wednesday, the Telegraph reported Thursday. He then went on to warn about the "prisoner’s dilemma,” a situation in game theory whereby two self-interested individuals fail to cooperate, even if that would be in their best interest.

 

[Arkain2K]

Britain should be granted the “Canada plus plus plus” trade deal that Brexit Secretary David Davis has called for, Italian Economic Development Minister Carlo Calenda said in an interview.

Calenda, a politically independent figure in the center-left government of Premier Paolo Gentiloni, told Bloomberg Television at his Rome ministry: “I think Canada plus plus plus will be the minimum that we need to achieve.” The European Union’s free-trade accord with Canada is the bloc’s most ambitious commercial deal to date.

Calenda urged the European Commission to keep the lead to hold the EU’s 27 remaining nations together, saying “the Commission has to be the most important character in this case.” He said the bloc should find a way “to keep on cooperating” with the U.K. after Brexit on trade strategy in dealings with outsiders, including countries which are not liberal democracies and work “with different values.”

Davis said last month that he wanted “Canada plus plus plus,” explaining this would probably start with “the best of Canada, the best of Japan and the best of South Korea and then add to that the bits that are missing, which is services.”

Michel Barnier, the EU’s chief negotiator, has specifically ruled out the agreement as described by Davis. “There is not a single trade agreement that is open to financial services,” Barnier told the Guardian newspaper on Dec. 18. “It doesn’t exist.”

 

[FIMN]

Any pro brexiteers ITT?

 

[Billy no mates]

Any pro brexiteers ITT?

Well I'm not necessarily Anti .

 

[VivaRevolution]

Oh what a disaster for the UK. Lol