Italy: UK and EU face “economic cold war”

Ongoing dispute over Brexit negotiations and conflicting interests may lead to an “economic cold war” between the UK and Europe, a senior Italian Government official has warned.

Mario Giro, the Italian Deputy Foreign Minister, has warned that whilst Brexit represented a loss for the continent, many within the Union hold a firm stance on negotiations with the U.K. In comments to the Guardian, he said:

“When we are among the 27 [countries within the EU, not including the UK], the hardliners are more numerous than it appears. I cannot quote a country in particular at the moment. We will see it at the beginning of the negotiation,”

“We are hearing more and more that there are people – economic interests – who are thinking they can inherit some economic position, thinking that they can take away from the UK some of the position of the City of London. Not Italy, of course, because we are not in that position. And this will be an economic war. Let’s say an economic cold war, and we are not in favour of it.” He noted.

This comes amid speculation that European financial cities are continuing to court banking business from the City of London, previously the epicentre of European finance. Cities such as Paris and Frankfurt are keen to capitalise on Brexit in order to attract re-locations from London.

The preservation of passporting rights remains a key concern for the finance sector, as Brexit negotiations continue to progress. Wall Street Bank Goldman Sachs has already anticipated a loss to these rights back in December. In a worrying blow for the industry, in Theresa May’s first major Brexit speech of 2017, she announced her intention to abandon a commitment to the single market.

In addition, Mr Giro’s comments follow similar concerns voiced by Italian Economy Minister Pier Carlo Padoan on Friday, over Trump’s commitment to a protectionist stance for the United States.