The City of London should remain Europe’s top financial centre following Brexit or the EU economy will suffer, Luxembourg’s finance minister has said.

“It’s key for Europe ... that the Number 1 financial centre in the world remains in Europe,” Pierre Gramegna was quoted as saying by the Reuters news agency on Monday:

“Punishing London to get a ‘chunk’ of the pie was a very short-term view, and a ‘no deal’ Brexit would not benefit the EU, but send UK financial services to countries outside Europe, Gramegna said.”

Luxembourg’s DP finance minister was speaking at a London School of Economics lecture entitled “The Impact of Brexit on European Financial Centres” on 23 October.

According to Reuters, he also said that a fair deal would be an asset for the EU:

“I find that a balanced final agreement with the UK, specifically for financial services, is in the interests of Europe itself.”

Gramegna urged British and European leaders to “dedramatise” the current Brexit negotiations, as a transition agreement and final trade deal were needed as an “urgent matter” for British and European businesses.

Update: An audio recording of Gremegna’s talk has been published on the LSE website.