EU Parliament chief: Bespoke financial services Brexit deal “can not be outcome”

A bespoke Brexit deal on financial services "can not be the outcome of negotiations" according to the man in charge of the EU Parliament's positions on the matter.

Guy Verhofstadt, the EU Parliament's Brexit chief, has suggested that Britain can not cherry pick the areas where it wants to make bespoke deals, and that any deal should ensure there "should be no competitive advantage for either the UK or EU".

"What will be in that part of the agreement, we will see. Passporting will not be there, you have to be part of the Single Market," he said in an interview with the BBC's Andrew Marr Show.

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"That will be a far more difficult negotiation than simply to say we like financial services so we'll put it in, we don't like this sector and we put it out.

"There will certainly be something about financial services, but there will also be something about regulatory equivalence then, because what we don't want is that with this whole agreement, establish a financial centre that is competing with the continent…"

"We want a level playing field," he added.

He said the deal would be different to those done with other non-EU countries such as Japan and Canada, in which they had sought convergence. "What Britain is asking for is a request for divergence in a number of fields and that we don't want" he said.

And he insisted that freedom of movement must remain the same during a Brexit transition period.

The movement of people between the UK and the rest of the continent can not be separated out from other rules such as trade and services, he said, and the status quo rules must be applied during the estimated two-year transition time.

Prime Minister Theresa May has said that she believes EU citizens coming to the UK during the period should not be granted the same rights as those who arrived prior to Brexit.

Talks will take place in the "coming weeks" about a transition deal, which Verhofstadt believes will be a "continuation of the existing rules, the existing policies, without [the UK] having a say" because Britain will no longer be a member of the European Parliament, adding that the EU is not against a transition period.

He also said the European Parliament wants an "association agreement" in which there will be a free trade deal.

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"We think that the future agreement with Britain needs to broader than only trade and economics," he said. "We want, in fact more than a free trade agreement. We should like to have Britain still in the Single Market, Britain still a member of the economic area, Britain member of a customs union, and so on."

However, Verhofstadt suggested the ball was in the UK's court with the government having signalled its "red lines" such as no free movement of people.

The former Prime Minister of Belgium also suggested that a failure of MPs to approve any deal, leaving the UK crashing out with no agreements at the end of March 2019, could trigger a crisis and another General Election, a new government "and even a new position of a new government on Brexit".

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