Brexit: France warns UK of retaliation over fishing deal

• France is threatening to take retaliatory action against the UK for breaching the Brexit agreement
• EU Commission President Ursula von der Leyen says the bloc could introduce change banking rules to punish Britain
• European Parliament’s ratification highlighted a lack of trust between Britain and the European Union
• EU reporter says “friends never say goodbye,” and both sides must strive to strengthen their relationship

France is threatening to punish the UK with retaliatory measures against British financial firms that do business with the European Union if UK Prime Minister Boris Johnson does not honour post-Brexit trade agreements on fishing.

The move would deliver a significant blow to the City of London, striving to reinvent itself post-pandemic by revitalising its financial district to attract overseas investment.

Although the UK and the EU reached a Brexit trade deal, London lost its “equivalence” status, meaning it no longer has access to European markets and given that there has been little progress between the EU and the UK on the matter, the City may need to forge a new path post-Brexit.

Bank of England (BoE) Governor Andrew Bailey has insisted that the EU is weaponising equivalence out of fear that Brexit Britain will outperform the bloc and adopt a more prosperous economic model.

Threats from France warning of retaliation on banking rules could be seen as another attempt to lock Britain into the EU’s system as a regulatory satellite.

France warns the UK of retaliation if they don’t honour fishing commitments

According to Minister for European Affairs Clément Beaune, Britain has failed to respect the Brexit fishing deal by delaying authorisation for French fishers to access its waters.

Mr Beaune told BFM Business that “we will not grant the UK’s financial sector access to Europe’s market until they respect the commitments outlined in the Brexit deal and we have guarantees on fishing.”

During his “no fish, no finance” threat, Clément Beaune also warned Britain that France was prepared to be as “brutal” and “difficult” as necessary.
He added: “If Britain fails to honour its Brexit commitments on fishing, we will give none. It is quid pro quo.”

His statement to BFM Business preceded a post-Brexit trade deal debate among the European Parliament, which occurred on April 27th.

The European Parliament overwhelmingly backed the ratification of a UK-EU Brexit trade deal on Tuesday but expressed an evident distrust for the British government. MEPs also issued warnings on British action on taxation, money-laundering and fishing access, with sanctions against access to the EU’s market suggested to be used as a tool to keep the UK in order.

UK Prime Minister Boris Johnson said Tuesday’s debate was the final step in what has been a turbulent journey for both sides and would provide stability to Britain’s new relationship with the EU.

However, the EU’s proposed sanctions bode ill for Britain’s financial sector, accounting for 7% of the economy and a 10th of all tax revenue.

Although fishing makes up just 0.1% of the economy, given tensions between London and Brussels remain and the European Commission has the right to respond with reprisal for acts of non-compliance, this could encourage firms to shift assets to the EU.

France urged the UK to ramp up plans to implement the fishing deal after protests over access to UK waters broke out at the Boulogne-sur-Mer harbour last week, and fishermen blocked seafood hauliers arriving from Britain.

On April 26th, French authorities pledged EUR 100M to fishers in northern France to negate disruption caused by new Brexit trade rules. The European Commission also said it would issue 21 licenses granting access to Britain’s waters this week.

David McAllister, the German chair of the Parliament’s Foreign Affairs Committee, described Brexit as a lose-lose scenario. Still, he acknowledged that a deal minimised damage that would have occurred if both sides failed to reach an agreement.

Britain officially departed the European Union on January 31st 2020. However, the transition period, which brought about new rules on trade, access to financial markets, freedom of movement and other factors, ended on December 31st 2020.

Fishing had been a central sticking point in last year’s negotiations between Lord David Frost and EU counterpart Michel Barnier due to the demands of France and other European fishing nations.

While both sides reached a fishing agreement, given the latest development, it’s clear that fishing is still a sensitive issue.

EU Commission President Ursula von der Leyen has also warned the UK that the bloc will not hesitate to use the “real teeth” to punish the UK for non-compliance and breaches against the Brexit trade agreement.

Ursula von der Leyen says EU will punish Britain over Brexit breaches

During the second day of the plenary session at the European Parliament in Brussels, which saw MEPs consent to a historic agreement, EU Commission President Ursula von der Leyen warned that “faithful implementation is essential.”

While Mrs von der Leyen welcomed the ratification, stating that it “marks the foundation of a strong and close partnership with the UK”, she went on to say that she would not hesitate to use “unilateral remedial measures” if necessary.

Ahead of the vote, Mrs von der Leyen also said that the trade accord gives the EU more leverage over the UK, meaning the bloc has the power to impose tariffs if Britain diverges too far from agreed standards.

In a debate that condemned the UK’s decision to extend grace periods on Northern Ireland protocol and praised EU victories in Brexit trade talks, MEPs also branded Brexit as a “historic mistake.”

That said, President von der Leyen said she hopes that the ratified treaty would allow the UK and the EU to form a solid and close relationship, citing the vision outlined by former Prime Minister Theresa May in a letter written March 2017.

Former Brexit negotiator Michel Barnier also commented, calling Brexit “a warning and a failure.” Mr Barnier added: “Brexit is a failure of the European Union’s, and we have to learn lessons from it.”

The UK’s chief negotiator, Lord David Frost, thanked Michel Barnier for his co-operation and said that “the ratification vote brings certainty and allows us to focus on the future. London and Brussels have a significant amount to work on together through the new Partnership Council, and we are committed to finding solutions that work for both of us.”

Speaking on Tuesday, Christophe Hansen MEP, EPP Group Spokesman on International Trade and negotiator on EU-UK relations, said, “friends never say goodbye, and we will continue to work alongside one another.”

Brexit ratification: It’s not the end of the road for the UK and the EU

Four months after the Brexit agreement came into effect, the European Parliament got the final say.

Nonetheless, we can all finally say “the deal is done”, and while the challenges that await Brexit Britain may be significant, the UK can look forward to the future and “build a more global Britain,” says PM Boris Johnson.

Manfred Weber MEP, Chairman of the EPP Group in the European Parliament, has urged Britain to honour the commitments made in the Brexit agreement, particularly the implementation of Northern Ireland protocol which he said will always be of top priority for the bloc.

Meanwhile, Christophe Hansen MEP implied that the end of this chapter is not the end of the road for EU-UK relations.

Mr Hansen said today marks a new chapter in the UK and the EU’s partnership. He went on to say that the European Parliament will be closely monitoring the British government to ensure ministers adhere to the Withdrawal Agreement and commitments on fair competition, the fisheries deal and standard rules.

MEPs commended Michel Barnier and the EU Brexit team for what they achieved during negotiations and the bloc’s unity.

The European Parliament has also been granted a significant role in implementing the trade accord, including the power to take retaliatory action against the UK for non-compliance, so it will remain vigilant of British activity to ensure safeguards are being enforced.