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Top EU Lawmaker: Business Conducted in Euros Should not Remain in London | ASHARQ AL-AWSAT English Archive 2005 -2017
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Manfred Weber, Chairman of the European People Party, takes part in a summit of the party in St. Julian’s, Malta, on March 30, 2017. (Reuters)

A top European Union lawmaker stressed on Tuesday that all financial business conducted in euros should be moved from London to the EU in wake of Brexit.

London is the world’s leading financial center for the clearing of derivatives denominated in euros, a lucrative business that the European Central Bank had tried in vain two years ago to relocate to the euro zone.

“People expect that we do the euro business and all the business which is linked to the euro on European soil,” Manfred Weber, who heads the conservative grouping, the largest in the European Parliament, told a news conference in Strasbourg.

Weber, an ally of German Chancellor Angela Merkel, said that it was not conceivable that after Brexit business conducted in euros should remain in London.

He added that the bloc should protect the interests of EU financial hubs, like Paris, Frankfurt, Dublin and Amsterdam.

The European Commission could propose a forced relocation from London to the European Union of the clearing business in legislative proposals on derivatives that are upcoming. But the EU executive has so far refrained from taking a clear position on the issue, which could sour Brexit talks.

The ECB considers it crucial to have the clearing business in the euro zone to facilitate the supervision of activities that could endanger financial stability if not properly monitored.

Weber said his remarks on relocating business from London were general but added they were about “European supervision, the European Banking Authority (EBA) and defending European jobs”.

No reference was made to the relocation of financial business in the draft Brexit resolution that the European Parliament will adopt on Wednesday.

Lawmakers only said in their draft text that the London-based EBA, the European agency monitoring banking rules, should be relocated as quickly as possible.

Meanwhile, the British parliament’s Brexit committee said London’s aim of forging a new deal with the EU in two years may be unrealistic, and the government must set out the economic implications of failure.

Britain wants to strike a free-trade deal with the bloc, but Prime Minister Theresa May says leaving without a deal would be better than a bad deal. The Exiting the EU Committee says that assertion is not based on evidence.

The committee said Tuesday that “the government should conduct a thorough assessment of the economic, legal and other implications of leaving the EU without a deal in place.”

May says she believes details of the “future partnership” can be sealed within two years.