France: Don't worry about us, Europe won't need London

LONDON: European companies will do just fine with reduced access to London’s financial markets after the UK leaves the European Union, France says, dismissing suggestions they may suffer.

“Don’t worry about us,” a senior French official said in an interview. “We have four global banks in France, which will continue to finance the French and European economies. And we are sure that US banks will also establish businesses in Paris. There won’t be a problem of financing.”

France is maintaining its tough stance ahead of negotiations between the UK and the EU on their future relationship, scheduled to begin end-March. President Emmanuel Macron’s government is opposed to a bespoke deal for UK banks and doesn’t envisage a trade deal for the country including financial services, the official said.

A country not signing up to single-market rules cannot have passporting rights, or a licence to sell services freely across the bloc, said the official, who declined to be identified in line with government policy.

UK banks will almost certainly have more limited access to EU markets once Britain quits the single market in March 2019. While the UK wants a wide-ranging accord to give financial institutions full EU access, a restricted approach similar to Canada’s is the only viable option, Commission officials said in a presentation on Tuesday. The Commission’s position is firmly backed by France.

For the talks, EU governments must first reach their own common negotiation position. While some countries, such as Luxembourg, want to grant Britain a more generous offer on financial services, France and Germany are taking a stricter line. — Bloomberg