16 July 2017

Financial Times: France wants hardest Brexit, says City envoy to EU

In the memo to the Treasury, MPs and financial institutions, Jeremy Browne, the City’s representative in Brussels since 2015, warned that his meeting at the Banque de France “was the worst I have had anywhere in the EU”.

The former Liberal Democrat minister said in the memo, published in the Mail on Sunday, that the French central bank wanted disruption and the disaggregation of financial services — even if it came at a cost. “France sees Britain and the City of London as adversaries, not partners,” he wrote.

“What we are witnessing is a whole-of-France collective endeavour, made both more giddy and more assertive by the election of [President Emmanuel] Macron.”

The leak of Mr Browne’s memo follows warnings from UK industry leaders that a breakdown of Brexit negotiations resulting in no deal would be “catastrophic”, with “massive disruption” leading to a sharp contraction in output.

Mr Browne said there was “plenty of anxiety” elsewhere in the EU about the French “throwing their weight around so aggressively”. Other countries, he noted, wanted a “grown-up, friendly relationship” with Britain. 

By contrast, “every country, not unreasonably, is alive to the opportunities that Brexit provides, but the French go further, making a virtue of rejecting a partnership model with Britain and seemingly happy to see outcomes detrimental to the City of London, even if Paris is not the beneficiary”. [...]

Mr Browne said he had met 26 of the 27 EU members in recent months. In contrast with Paris, Luxembourg saw its interests as “complementary to the City of London” and was “openly enthusiastic for us to remain as Europe’s big financial services hub”.

However, he warned that Luxembourg suggested Britain should not assume the EU would agree to confer all the features of single market membership during a transitional phase. [...]

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