Interesting speech by Barnier at his Alma mater...
During its 47 years of membership, the UK built up a privileged position in a number of strategic areas:
financial services, of course, but also as a regulatory and certification hub, and a major entry point into the EU single market.
In great part, this was made possible by the fact that the UK was an EU Member State, within the single market.
But the UK has decided to leave this single market, the customs union, and all the EU's international agreements.
It no longer wishes to participate to our common ecosystem of rules, supervision and enforcement mechanisms.
This choice will have consequences as of 1January 2021, even if we reach a deal with the UK on our future relationship.
1/ First of all, regarding imports from the UK:
On 1 January 2021, whatever the outcome of the negotiation, there will be checks and controls on all UK goods entering the single market – as there are for any third country.
The EU must be able to assess risks on any product coming into its market and, if necessary, activate physical controls.These checks are particularly important given the UK's position as a major entry point into the single market.
As part of these checks, we will need to pay the greatest attention to the rules of origin that we will put in our trade agreement.
Of course we love made in Britain!
But we must have guarantees that the goods we import from the UK – tariff- and quota-free – really are British.
We cannot take the risk that the UK becomes an assembly hub for goods from all over the world, allowing them to enter the single market as British goods.
2/ Second example: financial services:
As of 1 January 2021, UK firms will lose the benefit of the financial services passport. Indeed, no firm from a country outside the Single market has such a passport.
This means that UK financial services firms will no longer be able to offer their services in all EU Member States based on their UK authorisation.
Those UK financial institutions that want to continue working in all certainty across the Single Market know that they can establish themselves in an EU Member State.
For the rest, in a number of sectors, such as in the area of Credit Rating Agencies, the EU will have the possibility to grant equivalences.
We will do so when it is in the interest of the EU; our financial stability; our investors and our consumers.
But these equivalences will never be global nor permanent. Nor will they be subject to joint management with the UK. They are, and will remain, unilateral decisions.
I read in the Financial Times recently that London must retain its primacy as a hub for wholesale financial markets without becoming a rule-taker of European regulation.
As a former Commissioner in charge of financial services, allow me to question that.
Why should we accept that the profits stay in London while the EU carries the risks?
The UK may not want to be a rule-taker. But we do not want to be the risk-taker.
When the next financial crisis strikes, who will foot the bill? I doubt the UK will foot it for the EU.
That is why the EU must take the responsibility for its financial regulation, supervision and stability.
3/ Third example: the authorisation and certification of goods for circulation in the EU Single Market.
As of 1 January 2021, as a third country, the UK will no longer be able to grant marketing authorisations for pharmaceuticals or type-approvals for cars for the EU market.
In addition, goods certified by UK bodies will no longer be allowed to be placed on the EU market.
Indeed, the EU cannot accept, whatever the sector, to be reliant on the UK – as a third country that is no longer participating in the internal market – for key regulatory, supervisory and certification tasks.
Especially when we are talking about very large volumes. And even more so when we are talking about critical products, such as medical devices.
Aside from possible supply risks, this would raise enforcement issues.
That is why these functions must be carried out in the EU in the future.