Brexit, Financial Services Equivalence and a rather formal exchange of letters
The new UK Chancellor of the Exchequer, Rishi Sunak, and Executive Vice-President of the European Commission, Valdis Dombrovskis, have exchanged letters dated 27 February 2020 and 13 March 2020 respectively on the process of examining and hopefully agreeing "equivalence" for financial services sector authorisation purposes.
What strikes one when reading this exchange of letters is their formal style - no first names but rather "Dear Executive Vice President Dombrovskis" and "Dear Chancellor"; no "Kind Regards" or "Best wishes" and several other markers of business-like coolness. A study in political manners!
The Chancellor urges the EU Commission to work "in a structured way" towards concluding "equivalence assessments swiftly" before the end of June 2020 (as envisaged by the Political Declaration finalised in October 2019) and the Executive Vice-President in his English language letter of reply (with its French date stamp - "13 MARS 2020") sticks doggedly to the language of the Political Declaration by writing only of "endeavouring" to conclude the necessary equivalence assessments before the end of June 2020. Mr Dombrovski adds for good measure: "As agreed in the Political Declaration, this means proceeding with the [equivalence] assessments, not taking equivalence decisions by that date." Mr Dombrovskis also adds a rider, which does not appear to be in the Political Declaration itself, namely: "I note that equivalence assessment will have to be forward-looking, taking into account of overall developments, including any divergences of UK rules from EU rules."
With the Coronavirus emergency taking up so much of everybody's attention and with no doubt many other issues on politicians' plates, it is understandable if leading political figures like Rishi Sunak and Valdis Dombrovskis take comfort in their respective parties' lines but the temperature and the body language of debate (even if only expressed in the language of correspondence) may have to improve and warm up if a sensible outcome for both the UK and the EU financial services sectors is to be achieved so that effective business between them can continue post 31st December 2020 when the transition period is due to come to an end.
