Following the signing of Rishi Sunak’s Brexit deal, Brussels has lifted its veto on a banking agreement between the UK and the EU.
The European Commission had previously prevented an agreement to enhance cooperation in financial services until the Northern Ireland issue was resolved. In March 2021, a memorandum of understanding was agreed upon but was later suspended due to deteriorating relations.
However, following discussions between Foreign Secretary James Cleverly and Maros Sefcovic, the Vice-President of the European Commission, the agreement is now expected to be resumed. On Friday, the two officials met in London to finalize the Windsor pact, which has put an end to the acrimonious two-year stalemate over the Northern Ireland Protocol.
In a joint statement, they expressed their anticipation that the deal would pave the way for enhancements in trade, energy, and security ties across the Channel. The read-out stated that the two officials were looking forward to the prompt signing of the Memoranda of Understanding on intellectual property and financial services.
The banking agreement is viewed as the initial phase toward a more comprehensive deal between the EU and the City, as it will enable banking cooperation to thaw from its deep freeze.
A new joint forum will be established, which will facilitate regular meetings between high-ranking officials from both sides to address future regulations and challenges in the sector.
Industry insiders hope that over time, it will enhance trust levels to the point where Brussels will abandon its rejection of market access, also known as equivalence.
Miles Celic, the CEO of TheCityUK, stated, “This will be a crucial step in ensuring ongoing industry collaboration and continuity between the UK and the EU.”
Improved relations between Brussels and Britain have been signalled as new ways to ease trade barriers faced by British exporters are being explored.
To achieve this, working groups will be established to prioritize cutting border bureaucracy on both sides of the Channel. Additionally, Britain’s membership of the EU’s flagship science and research programme, Horizon, which was previously suspended due to the Protocol dispute, is set to be reinstated.
Both parties are committed to maximizing their relationship’s potential for mutual benefit. Despite opposition led by former Prime Ministers Boris Johnson and Liz Truss, the Windsor deal passed through the Commons on Wednesday. This agreement will reduce border checks on goods moving from Great Britain to Northern Ireland and limit the application of EU law in the Province.
