Euro business must be moved from London after Brexit

London should cede financial transactions denominated in euros to EU cities like Amsterdam, Paris or Frankfurt following Britain’s exit from the bloc, an EU Parliament leader said Tuesday.

Manfred Weber, the German head of the conservative European People’s Party (EPP) group, the parliament’s biggest bloc, underscored the threat London could lose such access on the eve of a parliamentary resolution on Brexit.

Huge volumes of euro-denominated trade pass through Britain thanks to so-called “passporting” rules, which allow the UK to host transactions in the single currency despite not itself being a part of the eurozone.

“When Great Britain is leaving the European Union, for us it is not thinkable that, at the end, the whole euro business is still managed in London,” Weber told reporters at the European Parliament in Strasbourg, France.

“Then the euro business should be managed on EU soil,” he said.

“I have the obvious interest that places like Amsterdam, like Paris, like Dublin, like Frankfurt can win and others can lose,” said Weber, an ally of German Chancellor Angela Merkel.

“There is already competition going on about who can win in this process,” he added.

He declined to go into specifics about what euro-denominated business he was referring to.

The EU has warned Britain that it will not be allowed to cling to advantages for its financial industry while blocking free movement of labour in the wake of Brexit.

London’s financial district has benefited from Britain’s EU membership as a foothold in the single market for British and non-EU banks.

Several major players in the sector, including US giant JP Morgan and Swiss UBS, have warned that thousands of jobs could leave the “Square Mile” financial district for the continent if that happens.

Weber was speaking before the European Parliament, which will have the final say on any Brexit deal, votes Wednesday on guidelines for the negotiations with Britain, after the starting gun was fired by British Prime Minister Theresa May last week.

However, a draft of the negotiating guidelines seen by AFP contained no reference to euro-denominated business in London.