Barnier says UK government will fail to protect city of London from Brexit hit

Michel Barnier, the EU's chief Brexit negotiator, has offered UK negotiators an olive branch, promis

Michel Barnier, the EU's chief Brexit negotiator, has offered UK negotiators an olive branch, promising a compromise on fisheries policy; Stefan Rousseau - Credit: PA

The EU's chief Brexit negotiator has warned finance chiefs that the UK government will fail to insulate the city of London from the consequences of Brexit.

Barnier said current demands during the Brexit trade talks were unacceptable, and that their proposals to ditch EU financial regulations could hurt the bloc.

He claimed the UK was attempting to retain freedom of movement for financial services whilst cutting it off for others.

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'I will be blunt. Its proposals are unacceptable,' he reportedly told lobbyists at a Eurofi think tank event. 'The UK is trying to keep as many Single Market benefits as it can.'

'[The UK] would like to make it easy to continue to run EU businesses from London, with minimal operations and staff on the continent,' he explained.

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'It wants to ban residence requirements for senior managers and boards of directors, to ensure that all essential functions remain in London.'

Barnier warned 'the UK cannot keep the benefits of the single market without the obligations'.

'Let us have no illusions: The UK will progressively start diverging from the EU framework. This is even one of the main purposes of Brexit,' he said.

'The size of the UK financial market and the very close links between the EU and UK financial systems mean we need to be extra careful. We need to capture all potential risks: for financial stability, market integrity, investor and consumer protection, and the level playing field.'

A spokesperson for the UK negotiation team defended its proposals. They said: 'We are asking for arrangements just like those the EU agreed with Japan. Japan is not in the single market.'

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