UK (Parliament Politic Magazine) – According to the latest reports, the UK has signed a pact with the EU which aims to increase cooperation on providing better financial services. Both the nations will set up a forum and this is where the EU and UK will meet twice a year and will discuss financial regulation and standards. This move was long awaited and is a sign that the UK is willing to work with the EU. Building a constructive relationship between the UK and EU is of mutual benefit. This will allow the UK and EU financial markets to flourish as both nations are “deeply interconnected”.
UK and EU Collaborate on Financial Services
The memorandum that will be signed was first outlined in the UK-EU Trade and Co-operation Agreement. It was designed in the wake of the UK losing access to EU markets under Brexit. This text was published last month. The memorandum amounts to a list of broadly shared objectives.
However, this cannot be described as an “agreement” as this would be a misleading statement. The UK will not be committing to align with the EU on the subjects of regulation. They will also not be conceding to any previous demands made by Brussels.
The UK does not have any plans on moving the processing of euro-denominated financial instruments that are out of London. Both sides are committing to hold a regular twice-yearly meeting where they will be discussing the “voluntary regulatory cooperation on financial services issues”.
Breaking Barriers: UK and EU Pledge to Intensify Financial Services Work
Both sides will be sharing information and working together towards tackling joint challenges and managing coordinate positions. The EU and UK have set up a forum that will facilitate dialogue. It will not restore UK access to the EU, and will not support any prejudged adoption of equivalence decisions. Under equivalence, the UK will have access to EU foreign firms in certain areas of financial services.
UK to work more closely with EU on financial services https://t.co/qS6KuFFw3O
— BBC News (UK) (@BBCNews) June 27, 2023
In March, the UK and the EU also signed the Windsor Framework. It aimed to ease the passage of goods that arrive in Northern Ireland from Great Britain. This will reduce the number of checks needed for the transportation of goods. This agreement was a huge sign of improving relations between the UK and the EU.
UK-EU to Forge Deep and Sustainable Partnership on Financial Services
The signing of the financial services memorandum is also an indication that the EU and UK have become conciliatory and pragmatic. UK’s approach to the EU under previous Prime Ministers Boris Johnson and Liz Truss, has signaled an alignment on future regulation. Discussion related to this issue has been avoided in the text.
The signing of the memorandum is an important turning point and has allowed the two countries to move forward. It is a positive thing for both countries as it will lead to a great partnership that will be based on trust. The cooperation between the EU and the UK will be delivering benefits for people on both sides. The memorandum that has been just signed is also an example of the benefits of the partnership.
The EU has made 37% of UK financial services exports in 2019. In return, the UK has also retained its position and has become one of Europe’s most important financial centres post-Brexit. The signing of the memorandum has set the stage for a new era of cooperation between the EU and UK partners. Both countries are hoping that this agreement will help to ensure that the financial services sectors of both the EU and the UK remain open for business.
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UK EU Collaboration A Win-Win Deal For Both
Treasury sources have also concluded that the agreement of the Windsor Framework has paved the way to push forward this memorandum over the line. This will be a great step to show a closer working on a few outstanding parts regarding the post-Brexit arrangements.
It will also highlight the tighter rules that are around the rules of origin which are due to come in for carmakers. We might see some significant changes in financial services that will be apparent shortly. This will provide plenty of time for the forums ahead of the next election.