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Friday, 23 February 2024
UK's plan to extend Brexit grace period infuriates Irish and EU officials
Mairead McGuinness, the EU commissioner for financial services, said the UK had lost single market access ‘because of the form of Brexit they chose’.

Move to extend grade period for trade with Northern Ireland has damaged trust, says EU commissioner

Boris Johnson’s unilateral move to ease the impact of Brexit on Northern Ireland has damaged Brussels’ trust in the government, according to the EU commissioner taking key decisions on access for the City of London to the European market.

The UK was accused of breaking international law for a second time on Wednesday after ministers said they would extend a grace period on a range of checks on trade between Northern Ireland and Great Britain.

The commission responded that under the Brexit withdrawal agreement, the decision should have been agreed with the EU. The claim was denied by Lord Frost, who has recently been given a seat in cabinet and responsibility for EU relations.

The move has infuriated the Irish government and officials in Brussels. The European commission is examining whether to make positive “equivalence” decisions that would allow the UK financial services sector to operate in the UK market.

Brussels has so far granted only limited direct access for the City of London under its system, which is designed to ensure that only firms operating under regulatory systems similar to its own can offer services in the EU.

Mairead McGuinness, a former Irish MEP who is now the EU commissioner for financial services, said it was a damaging episode. “Things like that don’t help build trust,” she said.

McGuinness further noted that Britain’s finance minister, Rishi Sunak, had told the Bank of England on Wednesday to be creative in keeping the City of London competitive after Brexit.

“This is a sensitive area … we need to be clear and have been consistency clear how we will approach this, and we have been very clear with the United Kingdom as well,” she said. “Equally the UK has said, indeed just yesterday, about their intentions, and what those intentions transfer into in terms of real action that may impact on the financial system, we’re not clear yet.

“To repeat the point, equivalence is not about recreating single market access; the UK lost that because of the form of Brexit they chose. Therefore, we will be looking at each particular element where we see an advantage or indeed for us to take action and I dare say the UK will continue in that same vein.”

McGuinness added that there remained gaps in information provided by Britain on its intentions to diverge from EU rules.

Frost, whose leadership of the UK’s negotiating team during the recent trade and security talks was marked by a robust style, was also personally criticised on Thursday by the Irish government for making a “very, very dangerous” unilateral decision.

Ireland’s minister for European affairs, Thomas Byrne, said the peace process in Northern Ireland should not be a victim of the UK’s newly antagonistic approach to the EU.

Bryne said he feared the consequences for continued peace in Northern Ireland if border issues there became embroiled in the difficult relationship between Brussels and London.

Earlier this week, loyalist paramilitary groups told the British and Irish governments that they were withdrawing support for the Good Friday agreement in protest at Northern Ireland’s Irish Sea trade border with the rest of the UK.

“Unilateral actions in the context of Northern Ireland are extremely risky to say the least, possibly illegal and certainly foolhardy,” Byrne said. “Michel Barnier made the point to other member states of the European Union and the peace process was fragile in Northern Ireland. And quite frankly, I would have appreciated some public recognition of that by David Frost”.

“I mean, if Britain wants to have an ongoing battle with the European Union, that’s fine, please, please leave Northern Ireland out of it … there is a peace process there to protect,” Byrne said.

Frost recently won out in a Whitehall power tussle to take over from Michael Gove both as the co-chair of a joint committee implementing the withdrawal agreement and a partnership council relating to the trade and security deal agreed last Christmas Eve.

Simon Coveney, Ireland’s deputy prime minister, said the EU was now considering legal action through the European court of justice.

“The EU are negotiating with a partner they simply can’t trust,” he told RTE’s Morning Ireland programme on Thursday. “That is why the EU is now looking at legal options and legal action which means a much more formalised and rigid negotiation process as opposed to a process of partnership where you try to solve the problems together.”

source: Daniel Boffey