But calling this a “agreement” is inaccurate. It does not imply that the UK will agree to follow EU regulations or give in to any prior requests Brussels may have made, such as shifting the processing of some financial products denominated in euros out of London.
The two parties are agreeing to a regular, twice-yearly meeting to discuss “voluntary regulatory cooperation on financial services issues,” according to what it implies.
The pact states that “both sides will exchange information, collaborate to address shared challenges, and coordinate positions.”
The measure, according to European Commission spokesperson Daniel Ferrie, “will set up a forum to facilitate dialogue.”
“It does not restore UK access to the EU, nor does it prejudge adoption of equivalence decisions,” he continued. If the laws regulating the sector are found to be “equivalent,” foreign enterprises may be permitted access to the EU in some areas of financial services.
However, crucially, coming after the Windsor Framework’s adoption, this is yet another indication that the UK has changed its attitude toward the EU from that of previous Prime Ministers Liz Truss and Boris Johnson, and may potentially indicate more agreement on future regulation. However, the text avoids mentioning this at all.
Less than 10,000 jobs have migrated, despite the fact that the EU accounted for 37% of UK financial services exports in 2019 and the UK maintaining its status as Europe’s most significant financial center.
The signing of the MoU “sets the stage for a new era of cooperation with our EU partners,” according to Chris Hayward, policy chairman of the City of London Corporation.
“We anticipate that this agreement will contribute to maintaining the viability of both of our financial services industries.”
