- Theresa May called last week for a system of “mutual recognition” with the EU after Brexit.
- However, a senior adviser to the EU’s chief Brexit negotiator Michel Barnier has cast serious doubt on the idea.
- “Mutual recognition has failed,” said Stefaan de Rynck at a talk in London on Monday evening.
LONDON – Theresa May’s plan to strike a generous EU trade deal after Brexit has been thrown into doubt by a senior adviser to Europe’s chief Brexit negotiator, who dismissed her trade plans as being based on a “failed” model.
May last week called for a system of “mutual recognition” on the standards of goods and services in a trade deal with the EU, whereby two trading partners recognised each other’s rules but were free to create their own. She suggested the system could be overseen by a joint UK-EU court.
However, Michel Barnier’s chief adviser Stefaan de Rynck said that the EU had moved away from a mutual recognition system – whereby member states recognised each other’s different rules on financial services – since the financial crisis in 2008, and now favoured a much more centralised approach whereby EU bodies create and regulate most of the rules.
“Mutual recognition has failed,” he said in a speech at LSE in London.
“There was a time we thought it would lead to market efficiency, but with the financial crisis we have gone for an approach of more harmonisation and centralisation and more EU bodies overseeing that and stronger powers for those bodies,” he said.
He described a “single European Union rulebook with common enforcement structures” and made clear that the system relies on the involvement of the European Court of Justice, which Theresa May has frequently ruled out.
“If you are in a very integrated market with a third country but you don’t have the joint enforcement structures, then you can see the potential for all kinds of difficult situations,” he said.
He also said the unity of the EU 27 countries had surprised him more than any element and warned that the UK would be “unwise to try and break that unity.”
The speech comes a day ahead of a speech by UK Chancellor Philip Hammond in which he sets out Britain’s plans for financial services after Brexit.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.