While attention focuses on Angela Merkel’s attack on the “illusions” of the British political class that Germany will help London on Brexit, it is worth looking at the toughening of the French position.
The French employers’ federation, Medef, has issued a strongly worded position paper stating: “The UK must not enjoy a more favourable situation within the EU as a non-member with opt-ins than it did as a member with opt-outs. In particular, as regards financial services. Brexit means Brexit. (Medef italics)”
Medef insists on three points that run counter to Theresa May’s or Jeremy Corbyn’s line on Brexit. The EU’s “four freedoms” of movement of money, goods, services and people are inseparable and irreversible; access to the single market cannot be granted unless all its rules are respected; and EU authorities must have continued surveillance not only over UK goods and services that enter the EU market but also on production conditions.
However no one on Planet Brexit in London seems to bother with what foreigners say. This week, a so-called Prosperity UK conference organised by pro-Brexit City bigwigs and Tory grandees came out with moth-eaten pleas that Brexit shouldn’t mean Brexit for the City, which should be allowed to carry on with business as usual.
This was slapped down by French finance minister Michel Sapin, who told the BBC that the $120 trillion euro business of clearing trades in euros could not stay in London once Britain has left. “The majority of the clearing houses cannot remain in London,” said Sapin. Christian Noyer, governor of the Bank of France from 2003 to 2015, echoed Margaret Thatcher last year in speaking of euro trades, saying: “We want our money back!”
The hot favourite in the French presidential election, Emmanuel Macron, who has been in close contact with Berlin this year, has said that City financial institutions cannot continue to sell into the $12 trillion Eurozone market of 340 million people.
On a visit to London, Macron made clear that for eurozone governments the idea the City can keep passporting rights whether dressed up as regulatory “equivalence” or, in the latest wheeze, as one-by-one sectoral or company agreements to abide by EU rules “should not be seen as a technical issue but a matter of sovereignty”.
Before last year’s referendum Macron was even more scornful, saying Brexit meant “Guernseyfication” of the UK, which would be a little country on the world scale. “It would isolate itself and become a trading post and arbitration place at Europe’s border.”
Setting out France’s Brexit policy if he became president, Macron said: “You’re either in or you’re out. The day after an exit, there would be no more financial passport for British establishments. The European Council should give the British an ultimatum on their intentions and the French president will be very clear in that respect. If the UK wants a commercial access treaty to the EU market, the British must contribute to the European budget like the Norwegians and the Swiss do. If London doesn’t want that, then it must be a total exit.”
With his far-right nationalist opponent Marine Le Pen seeking to emulate Brexit in France, the May 7 run-off, a month before the UK election, will be a vote for or against the EU.
Assuming he wins, President Macron will look east, north and south to strengthen Europe, with the backing of Medef. The question for the City and for the UK political class is: At what stage will British “illusions” about Brexit evaporate as the Leave lies bubble is pricked in Paris and Berlin?
Denis MacShane is the UK’s former Minister of Europe and a Senior Advisor at Avisa Partners, Brussels.