The Guardian has a very significant story on its front page tomorrow. It has obtained notes of a meeting that Michel Barnier, the EU’s chief negotiator, had with senior MEPs this week. These notes show that Barnier told them that he wanted a ‘special’ deal that would guarantee access for the EU firms and countries to the City of London’s financial markets.
Interestingly, Barnier also said—according to The Guardian’s account—that ‘There will need to be work outside of the negotiation box … in order to avoid financial instability.” This suggests that Barnier shares Mark Carney’s view that there are financial stability risks for Europe if the EU cuts itself off from the City of London. Also, by framing the issue as one of financial stability and saying that it should be considered outside of the ‘negotiation box’, Barnier does appear to be providing a face-saving way for the EU to allow UK financial services continued access to the EU’s internal market post-Brexit.
This leak provides Theresa May with a strong backdrop for her Brexit speech on Tuesday. It suggests that a deal on financial services is far more doable than many people think. It also indicates that the EU’s need to access the City of London’s financial markets will mean that, ultimately, a deal is done between the UK and the EU.