UK EU Relations on the Rise

British Prime Minister Jeremy Hunt is preparing to sign a deal with the EU on cooperation in financial services, a sign that relations between the two countries are improving. The agreement provides a platform for discussions between the EU and the UK on regulations related to financial services and the City of London, reflecting the positive direction of UK EU relations. This is similar to the EU’s existing framework with the US. The visit by a British Prime Minister to Brussels is the first in more than three years and marks progress since the Windsor Framework resolved differences over Northern Ireland’s post-Brexit trade deal, further highlighting the improvement in UK EU relations.

The Impact of the UK-EU Trade Agreements

The Memorandum of Understanding was delayed by two years due to disagreements over the UK-EU Trade and Cooperation Agreement. However, the deal alone does not extend access to EU markets for UK financial services firms, except for clearing, where there will be temporary regulatory “equivalence” until mid-2025. Mr Hunt highlighted the importance of building a positive relationship between the UK and EU financial markets, as they are closely linked and can benefit from working together, a key aspect of UK EU relations.

Meeting with EU Commissioner McGuinness

During his visit, Mr Hunt will meet EU Commissioner for Financial Services Mairead McGuinness to discuss the EU’s plans for trade, economic security, and green industry. Chris Cummings, CEO of the Investment Association, sees the signing of the Memorandum of Understanding as an important step, in finding common solutions to common challenges within the framework of the Co-Regulatory Cooperation Forum, further strengthening UK EU relations.

Mr Hunt’s Vision for UK’s Participation in the Horizon Science Program

It highlights the importance of engaging in pragmatic conversations centred around UK EU relations. Mr Hunt will also address the UK’s efforts to participate in the EU’s €95bn Horizon science program, which has faced setbacks due to disputes regarding funding and trade agreements involving Northern Ireland. With these issues resolved, Mr Hunt is applying for a discount on UK Horizon admission for lost time, demonstrating the interconnectedness of Euroupean relations.

The Horizon program will run from 2021 to 2027.