The European Union cannot let London remain the main financial centre for the euro zone after Brexit if Britain does not want to be bound by EU financial rules, Eurogroup President Jeroen Dijsselbloem said on Tuesday.
The Dutch finance minister told a European Parliament committee he did not expect Britain to accept being bound by EU rules after leaving the bloc, and so the Union would have to take a “firm stand” against London remaining the main financial centre for the continent.
“We cannot allow a third country to have access, full passporting rights, to financial service markets in Europe if at the same time we allow them to deviate in terms of capital standards, requirements, consumer protection, etc etc,” Dijsselbloem said at a committee hearing.
“We can’t allow the financial service centre for Europe and the euro zone to be outside Europe and the euro zone and to go its own way in terms of rules and regulations, requirements etc,” he added. “Simply … we can’t allow that to happen.”
“We have to take a firm stand on this,” he added. “There is no alternative.”
Noting his own country’s strong trading ties with Britain, he said the European Union should be prepared to try and dampen economic fallout from Brexit on both sides of the Channel.
But uncertainty over the departure terms would already push investors to shift interests away from Britain, he said.
“I say this without any joy at all – this will start having an impact on the British economy, on the City, in the coming years,” he said. “We should be fully prepared. But it’s going to be a tough ride, specifically for the UK.”
Source: Reuters (Reporting by Alastair Macdonald; Editing by Tom Heneghan)