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Brewing rift between UK and France over financial regulation

Saturday, December 5th 2009 - 02:55 UTC
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Michael Bannier appointment sparked fears in London's City financial district Michael Bannier appointment sparked fears in London's City financial district

Talks scheduled to take place on Friday between UK Prime Minister Gordon Brown and French President Nicolas Sarkozy have been cancelled. They may have helped to clear the air after President Sarkozy said the UK was the “big loser” when a Frenchman got the job as EU financial regulator.

Former Foreign Minister Michel Barnier was named as the European Union's internal market commissioner last week. That puts him in charge of a radical revamp of banking law. The appointment sparked fears in London's City financial district that Mr Barnier would act against the free-market practices it operates on.

President Sarkozy was due to visit London to meet Gordon Brown, but the cancellation of the meeting has fuelled speculation that the French president's remarks have sparked a rift between the two countries.

Both sides say their failure to meet is down to other commitments.

The UK said the meeting would no longer take place because of unspecified “diary constraints”.

The French president's office said Mr Sarkozy had other “long-standing” engagements. These include lunch with the new EU president Herman van Rompuy, and a meeting with the president of Benin, Dr Thomas Yayi Boni.

France is one country that blames the Anglo-Saxon economic model for the global economic crisis. Many UK politicians and business leaders fear France wants tighter rules to curb bonuses and make it harder for banks to lend.

“The political rhetoric coming from Paris has woken up the British government to the threat posed by EU regulations,” said Anthony Browne, economic adviser to London Mayor Boris Johnson.

However, French Finance Minister Christine Lagarde denied that there was any rift between Mr Brown and Mr Sarkozy.

She said: ”They are due to see each other at the European Council in about a week's time, so I'm not surprised that they do not want to multiply visits and exchanges”.

Categories: Economy, International.

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