The European Union-United Kingdom summit in London on 19 May 2025 offers an opportunity for British Prime Minister Keir Starmer and the EU representatives to widen the scope of post-Brexit dealmaking. Financial services should be part of the improvement agenda. While previous negotiations prioritised shielding markets and banking from the broader tensions, that approach – five years on from Brexit – no longer serves British and EU interests. Leaders now should use the relationship reset to protect financial stability, withstand transatlantic turmoil and help their respective economies thrive.
The EU and the UK have incentives to work together to make their respective economies as strong as possible, especially as questions start to be raised about the global roles of the US and the dollar. Financial services should join defence, energy, veterinary standards and other topics on the summit table, with a goal of reaching political agreement on further cooperation.
Both sides have an interest in upholding high international prudential standards for the financial system, and they each have strengths to share with each other. For example, the EU can learn from the UK on how to simplify financial regulation, while the UK can work with Europe to strengthen sectors including sustainable finance, digital currencies and other innovative financial technology.
Political leaders should use the May summit to provide a mandate to technical staff. Once that backing is secured, technical workstreams can work out specific agreements, either through inclusion of financial services in a revised EU-UK Trade and Cooperation Agreement (TCA) or as part of an ad-hoc accord. We see two top priorities:
- Easing tensions and reducing risk from the long-term spat over the clearing and settlement industry; and
- Managing so-called letterbox firms, which have an official home base in the EU but continue to control assets from London.
About the Authors
Jesper Berg is a Non-Resident Fellow at Bruegel.
Rebecca Christie is a Senior fellow at Bruegel and hosts Bruegel’s podcast, The Sound of Economics.
Hans Geeroms is Emeritus Professor of the Katholieke Universiteit Leuven where he lectured EU economic policy and International Economics. He is a visiting professor at the College of Europe where he teaches EU macro-economic policy.
Francesco Papadia is the chair of the Selection Panel of the Hellenic Financial Stability Fund (HFSF).