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The flow of financial services between the European Union and the United Kingdom will be less fluid from January, whatever happens in talks on a future free trade agreement, the EU’s designated head of financial services said.
Britain left the EU last January and unrestricted access to the single market ends on December 31 under transitional agreements.
Brussels and London are in talks on a free trade agreement, although financial services are handled separately.
“In all circumstances, with or without an agreement, trade in financial services will be different and less fluid from January 1 of next year,” Mairead McGuinness told the European Parliament.
If confirmed by Parliament, Ms McGuinness will lead the work of the European Commission which will decide how much EU access the City of London will have from January.
“We need to avoid being too dependent on a third country for key financial services,” she said at a confirmation hearing on her appointment as financial services commissioner.
A veteran member of the European Parliament and former journalist, Ms McGuinness said it took investigative journalism to uncover the € 1.9 billion hole in the balance sheet of the now-collapsed German payments company Wirecard.
“The Wirecard scandal is a shocking story of fraud and oversight failures,” McGuinness said.
“We have to take a hard look at what went wrong there and learn the lesson … It’s such a huge problem.”
EU states have in the past rejected more common oversight in the markets, fearing they would lose more regulatory sovereignty. Wirecard’s collapse has prompted the European Commission to review the issue.
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