As preparations for this week’s European summit enter their final stretch, France is leading resistance to UK demands for a deal to shield British banks from the rules governing lenders in the euro area.
French negotiator Philippe Leglise-Costa pushed back against British Prime Minister David Cameron’s insistence on fencing off financial regulation for the City of London at a meeting of European officials in Brussels Thursday. While his stance throws up a potential obstacle to a deal between European Union leaders, it earned him the rueful respect of Martin Selmayr, chief of staff to European Commission President Jean- Claude Juncker.
“You’re a good tactician,” Selmayr said with a smile, according to two EU officials with knowledge of the exchange. “You’re a bit greedy.”
As diplomatic efforts to keep Britain in the EU gather pace before government leaders meet on Feb 18, one of Europe’s longest-standing rivalries is emerging as a critical fault line. French officials argue that the plan EU President Donald Tusk thrashed out with Cameron this month is skewed towards UK interests and they are rallying support from both euro-area members and those outside the currency zone that are considering joining the banking union. Leglise-Costa and a commission press officer declined to comment on the exchange when contacted by Bloomberg News.
Tusk will travel to Paris on Monday to meet President Francois Hollande at the start of a whistle-stop diplomatic tour that also takes in Bucharest, Athens, Prague and Berlin before he welcomes EU leaders to Brussels on Thursday.
A deal would pave the way for Cameron to hold a referendum on staying in the bloc as early as June 23 and campaign against a “Brexit”— a UK exit from the EU. Failure would present a major setback for efforts to avoid a breakup.
Cameron needs approval from every other nation in the EU for a settlement.
“There are some concerns about the single rulebook and the financial sector,” Dutch Finance Minister Jeroen Dijsselbloem said in Brussels on Friday before a meeting of his EU counterparts. “The financial sector is a very strong element of our joint internal market and we must make sure that we don’t lose that. That’s in the interest, I would say, to The City and to the rest of Europe.”
For his part, Cameron will address the European Parliament’s political group leaders on Tuesday. He’ll need their support to pass some of the legislation changing the UK’s EU membership terms.
While diplomats on Thursday made progress on technical and legal clarifications of the text published earlier this month, the main political items are still not settled, a separate EU official said.
on the condition of anonymity because the talks are private.
“We believe in the place of the United Kingdom and what it represents, including its financial system—its place is in Europe, in the European Union,” French Finance Minister Michel Sapin told reporters on Friday. “We don’t want any harm to come to this single market and financial market. There can be different legislation, but they have to have the same effect across the European Union.”