Fearful financial industry sends secret mission to EU

Delegation heads to Brussels for non-governmental negotiations

Fearful financial industry sends secret mission to EU

Insurance News

By Terry Gangcuangco

An independent delegation in the UK headed by former city minister Mark Hoban will try to close a free-trade deal in Brussels, according to people familiar with the “unofficially supported” plan.

The City of London delegation will make its way to Brussels in hopes of convincing countries such as France and Spain of the merits of the plan, which is based on the mutual access principle or barrier-free operations even with Britain’s departure from the European Union, according to a report by the Financial Times.

As negotiations are politically sensitive, details of Hoban’s free-trade plan are said to be closely guarded. However, it has supposedly gained support not only from German officials but from Whitehall or the British civil service as well.

It is believed the free-trade plan will make a credible blueprint for the Brexit negotiations amid fears of a hard or no-deal Brexit. Aside from being based on mutual access, what Hoban’s delegation is proposing will also involve joint dispute resolution and shared regulatory supervision.

Huw Evans, director general of the Association of British Insurers (ABI), has recently called for an orderly Brexit, citing the need for a “sensible and mutually beneficial future trading relationship”. ABI is also in favour of formal cooperation between political parties as well as between the houses of parliament so that an arrangement is reached during Brexit negotiations.

Meanwhile, Allianz subsidiary Euler Hermes has warned of a three-year recession from 2019 if no transition deal is agreed upon when negotiations end. More than 3,000 firms are forecast to go bankrupt and the GDP is feared to contract by 1.2%.

“The new government must endeavour to settle on a transition deal as it will be next to impossible for the UK and EU to finalise and ratify a free-trade agreement in the next two years at the same time as finalising the EU exit,” said Ana Boata, European economist at Euler Hermes.

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