The European Union’s chief Brexit negotiator has hinted London’s financial centre may get a special deal in what could be the first major climbdown by EU leaders.
Michel Barnier, who presents himself publicly as an uncompromising hardliner, told a private meeting of Members of the European Parliament (MEPs) that there should be a special relationship between the EU and the City of London to avoid economic disaster hitting the bloc.
The Guardian claims to have seen unpublished minutes of the meeting, in which Mr Barnier says: “There will be a special/specific relationship. There will need to be work outside of the negotiation box… in order to avoid financial instability.”
So far, EU leaders have publicly expressed a desire to cut off London’s access to the EU and pledged to steal its business, however there are concerns that doing so would do more harm to the European Union than the UK, especially as London remains the continent’s biggest financial centre.
Earlier this week, Bank of England Governor Mark Carney said that Brexit poses a bigger threat to the EU than it does to Britain.
“I am not saying there are not financial stability risks in the UK … but there are greater short term risks on the continent in the transition than there are in the UK,” he said.
“The EU have far more to lose than the UK, especially as it becomes ever more apparent that the UK is well positioned to strike free trade deals with the US, Australia, and other fast-growing regions,” he added.
A spokesman for the European Commission told The Guardian the minutes did not “correctly reflect what Mr Barnier said,” but the newspaper says a source who was present at the meeting confirmed they were “more or less accurate”.
Andrew Haldane, the Bank of England’s chief economist, also earlier this week described the bank’s doom-laden pre-referendum forecast as their “Michael Fish moment”, referring to the BBC weatherman’s infamous dismissal of a hurricane warning just hours before Britain was hit by one of the worst storms in living memory.