UK Chancellor Jeremy Hunt is getting ready to sign an agreement with the EU regarding cooperation in financial services, which shows that relations between the two sides are improving. This agreement will create a platform for discussions between the EU and the UK on regulations related to financial services and the City of London. It’s similar to an existing framework the EU has with the US. This is the first visit to Brussels by a British chancellor in over three years and marks progress since the “Windsor framework” resolved the disagreement over Northern Ireland’s trade arrangements after Brexit.
The memorandum of understanding was delayed for two years due to disagreements following the UK-EU Trade and Cooperation Agreement. However, this agreement alone doesn’t grant UK financial services companies better access to the EU market, except in the area of clearing, where there’s temporary regulatory “equivalence” until mid-2025. Hunt stresses the importance of building a positive relationship between the UK and EU financial markets, as they are deeply connected and can benefit from cooperation.
During his visit, Hunt will meet with Mairead McGuinness, the EU’s financial services commissioner, to discuss trade, economic security, and the EU’s plan for a greener industry. The signing of the memorandum of understanding is seen as a significant step by Chris Cummings, CEO of the Investment Association, who emphasises the need for practical discussions that focus on finding common solutions to shared challenges through the joint regulatory cooperation forum.
Hunt will also address the UK’s attempt to rejoin the EU’s €95 billion Horizon science program, which was delayed due to disagreements over funding and Northern Ireland’s trade arrangements. Now that these issues have been resolved, Hunt is requesting a discount on Britain’s participation fee in Horizon to account for the time lost. The Horizon program will run from 2021 to 2027.