Despite reservations from Macron, it looks likely that the EU will approve a one year delay with possible break clauses during this period. For all of us in the City busy trying to update Brexit contingency plans for the latest possible outcome, the only relevance is how long the current passporting arrangements remain in place. The longer this period, the better as this improves the chances that the deal we really care about may be agreed i.e. post Brexit financial services passporting rights and freedom of movement of skilled labour. What is still unclear is whether the so called “Implementation Period” will also be extended post a future exit date or will it still end on 31 December, 2020. If the EU summit fails to agree a day with the PM, the only way we can avoid a hard Brexit will be to revoke Article 50.
Meanwhile, the continued uncertainty continues to impact all financial services firms in the City. Although the number of jobs lost to the EU remains fairly small, what is more difficult to quantify is the number of jobs that have not been created. Also, the UK and EU regulators have been unable to focus on key priorities e.g. AML and market abuse as future of key regulations like MiFID II and MAR remains unclear.