UK, EU sign delayed financial services pact

UK, EU sign delayed financial services pact (illustration photo/ Source: freepik.com)

A memorandum of understanding was initially struck in March 2021 but left unsigned until now because of soured relations between post-Brexit London and Brussels over trade rules in the UK territory of Northern Ireland.

An EU-British deal known as the Windsor Framework, signed in March this year, resolved the Northern Ireland issue.

"I think it's fair to say we've turned the page in our relationship," said EU financial services commissioner Mairead McGuinness.

UK finance minister Jeremy Hunt, who travelled to Brussels to sign the financial services agreement, said the deal was "an important turning point" and "not the end of the process but the beginning" of enhanced dialogue with the EU.

London, a global financial hub, was keen to sign a deal.

The memorandum creates a framework for voluntary regulatory cooperation in the area of financial services between the EU and the UK, including a joint regulatory forum where common issues can be raised.

McGuinness said the first meeting of the forum was expected to be held late this year.

"While the UK is no longer in the EU, or indeed in the (European) single market, we still share many of the same issues and challenges, like fighting financial crime, supporting sustainable finance and enabling digital finance," she said.

Asked about another key benefit unlocked by the Windsor Framework -- rejoining the European Union's 96-billion-euro ($105-billion) Horizon Europe research programme -- Hunt said financial details were still being worked out.

Britain is seeking a big discount on how much money it would have to contribute to again be part of Horizon Europe.

"We are having very good discussions, and crunchy discussions can be friendly discussions," he said.

McGuinness said she was involved in the talks on Horizon Europe, but "certainly I would encourage more crunching so that we get a result".

British scientists have voiced fears about the impact from missing out on the financing from the vast Horizon programme, designed to help fund scientific breakthroughs.

London argues it should get a discount after missing the first two years of the funding, which runs from 2021 to 2027.