The EU must continue to set rules for UK products distributed in the bloc post-Brexit, according to the European Parliament’s chief Brexit negotiator.

Speaking at a press conference in Vienna this week, Guy Verhofstadt told IPE that “rules have to be defined” to ensure smooth transactions between the UK and EU.

“Of course there can be products from Britain coming to the continent but only according to the rules – and we have to set these rules,” Verhofstadt said.

He warned that this might also mean that some products will no longer be allowed under EU regulations.

“It is not a question of punishing a country but of principles,” he said.

Verhofstadt renewed his hope that the EU and the UK would reach an association agreement.

“We have to avoid a ‘Swiss nightmare’, ie that the relationship between the EU and another country is based on many different individual treaties,” he said.

Meanwhile, creating a Capital Markets Union (CMU) for the EU was a “top priority” for the former Belgian prime minister.

“We have to go full-speed ahead with the capital market to create an attractive basis for foreign investors,” he said. “Currently we do not have a real credit investment market in Europe, for example.”

He urged EU member states to modernise financial services regulation to “create a level playing field to attract business”.

“The biggest problem”, he said, was that there had as yet been no agreement on the CMU’s proposal to create a single resolution fund for the bloc.

“It will be big enough to solve the problems of mid-size banks, but there is no agreement on how to finance it,” Verhofstadt said.

Verhofstadt was speaking at an investment fair organised by Austrian quarterly magazine Der Börsianer.

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