EU threatens the City of London over its £150billion a day trade in euros as Brexit talks turn ugly
[ad_1]
Angry EU threatens the City of London over its £150billion a day trade in euros as Brexit talks turn ugly
- EU has delayed decision on if City of London can continue clearing house trade in euros
- Clearing houses has been a long battleground between Britain and the EU
- Paris and Frankfurt want to challenge London’s dominance of financial markets
The EU is retaliating in the Brexit divorce battle by delaying the decision on whether the City of London can continue to handle vastly lucrative euro transactions.
The warning shot against Boris Johnson’s plans to breach part of the Withdrawal Agreement threatens the clearing house trade in euros on the London Stock Exchange – amounting to more than £150billion every day.
Clearing houses stand between the two sides of a trade to ensure its smooth completion.
They have also long been a battleground between Britain and EU lawmakers, with Paris and Frankfurt keen to exploit Brexit to challenge London’s dominance of the financial markets.
The warning shot against Boris Johnson’s plans to breach part of the Withdrawal Agreement threatens the clearing house trade in euros on the London Stock Exchange – amounting to more than £150billion every day
EU leaders believe the bulk of the clearing for its currency should reside in the eurozone and be regulated by its own European Central Bank.
Currently the London Stock Exchange clears 90 per cent of euro interest rate swaps, a financial contract heavily used by companies on the continent to shield themselves against unexpected moves in borrowing costs.
Britain had been offered ‘time-limited’ access to euro derivatives clearing from January to avoid huge disruption to financial markets.
The European Commission was due to decide whether to continue with the arrangement later this week, but is now expected to delay it until around the end of the month.
Andrew Bridgen, Tory MP for North West Leicestershire, (pictured) said that the EU ‘clearly don’t want to do a trade deal’
The delay has infuriated Brexiteers and alarmed the City.
Andrew Bridgen, Tory MP for North West Leicestershire, said: ‘Given that the EU breaches the withdrawal agreement by not negotiating in good faith and threatening to ban UK food exports to Northern Ireland, this latest response makes we wonder why were even trying to do a deal with these people.
‘They clearly don’t want to do a trade deal.’
Allie Renison, head of trade policy at the Institute of Directors said: ‘The euro clearing decision has been a sore point in negotiations. Delaying the decision spells uncertainty for firms on both side of the Channel. Business leaders want to see the talks stay constructive and will be concerned that time is running out.’
[ad_2]
Source link