City blasts “cul de sac” after Barnier blocks UK’s financial services position

The Square Mile has been left frustrated by reports that the EU’s chief negotiator has already snubbed the UK’s plan for a post-Brexit deal around financial services.

Michel Barnier has warned European colleagues against accepting the UK’s new proposal of enhanced equivalence, arguing it would prevent the bloc from withdrawing access to the EU’s markets unilaterally.

He told ministers on Friday it would rob the EU of its “decision-making autonomy”, according to the Financial Times.

Major City firms and lobby groups are waiting for an official position before going public. However, key figures have told City A.M. that they fear “we are now in a permanent cul de sac on this”.

One said: “People are just tearing their hair out now – the politics is stuck. All that means is people are intensifying their own plans, actually rolling their plans out, which means relocations.”

Asked who was to blame between Brussels and the UK government, the source said: “It’s a bit of ‘a plague on both your houses’ – but all that means is people are turning away from politics and towards what their regulators are telling them to do to make sure there is no systemic impact”.

Another added: “There’s just 12-14 weeks left to get a deal done, we can see from both the EU and UK side that any deal is going to be difficult politically.

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