However, Robert Oulds, director of pro-Brexit think tank the Bruges Group, has said the bloc’s “childish” attempts to punish the City of London were doomed to fail – and any such move would result in the EU’s financial system rapidly running out of money. Ms McGuinness, head of the City of London Corporation’s policy and resources committee, has said the deals which Japan has secured with both the EU and UK were a “model” which needed to be replicated elsewhere.
Instead, the UK’s financial sector was consistently being treated like a “neglected child” during negotiations, she claimed.
Mr Oulds told Express.co.uk: “The EU relies on the City of London.
“It would be completely self-defeating.”
Such a move would be a classic example of cutting off one’s nose to spite one’s face, Mr Oulds said.
He added: “They cannot do that to themselves.
“Not only that, the EU’s financial system would run out of cash in days.”
Mr Oulds said he was not worried by any suggestion that the EU was prioritising Japan over the UK.
He said: “This is just a negotiating position.
“We are closer neighbours and bigger partners.
“We do see some really promising signals about what we might achieve in other parts of the world that we would like to see replicated too with our EU partners.”
Speaking in August, European Commission executive vice president Valdis Dombrovskis, who was at the time its finance commissioner, warned regulatory equivalence – whereby City firms gain access to the EU – could still take months to be granted.
He added: “In some areas we will not be in a position to adopt equivalence decisions.
“Not all EU parameters are in place in these areas.
“Implementing rules are not yet in place.”
Earlier this year top financial lawyer Barney Reynolds, a partner at Shearman & Sterling, said the City played a vital role in mitigating the risk posed to the world’s economy by the eurozone.
He explained: “The nub of it is that the eurozone states are running a currency system which is half-finished with the result that it is extremely risky.
“And that risk is not being run principally by them since the set-up offloads it – it defaults to the rest of the world.
“So our pensions and investments are running that risk.
“Apart from the fact that right now the Bank of England mitigates that risk.
“So the Bank of England stands as protector to the global market from that risk because we host the market here.”
Published at Sat, 24 Oct 2020 11:59:00 +0000