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Last I read, settling the financial obligations with the EU will involve the UK paying billions. I believe they are still negotiating the exact amount, but in any case, the declining value of the pound against the euro won't help this any.
Whilst London may even become more attractive to the Financial Sector if it becomes more flexible then the EU in relation to rules and regulations, as well as corporation tax.
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This could well turn out to be the case.
However, in order to ensure continued access to the single market, some financial institutions are planning/moving their headquarters, or at least portions of their operations. to Frankfurt, Paris, Dublin, ...
Whilst London may even become more attractive to the Financial Sector if it becomes more flexible then the EU in relation to rules and regulations, as well as corporation tax.
More flexible? If US wants to trade with Germany, then UK will somehow remove the EU rules and tax in that trade? I don't see how that works. US will have to deal with the EU rules, like it or not, and in order to have direct access to the EU market, they will need access points within EU itself.
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Originally Posted by Finn_Jarber
More flexible? If US wants to trade with Germany, then UK will somehow remove the EU rules and tax in that trade? I don't see how that works. US will have to deal with the EU rules, like it or not, and in order to have direct access to the EU market, they will need access points within EU itself.
Firstly Germany has a massive financial services surplus with the UK, so will lose money.
Secondly we can be as felexible as other countries such as Switzerland or Luxembourg, indeed the EU President Jean-Claude Junker was always bery flexible when he was Prime Minister of Luxembourg with lots of dodgy tax deals involving US Companies.
Thirdly the EU is already looking at the issue of clearing Euros after the US itself expressed concern, stating it didn't see how a body of water the size of the Atlantic should effect Euro clearing never mind the English Channel. As things stand currencies can be cleared in most countries, and if the EU started demanding that Euros can only be cleared in the Eurozone then other countries might stop their currencies being within the Eurozone. Euro's can currently be cleared in NYC and the Far East and most financial markets already have access to the Eurozone. Furthermore any attempt to block British Financial Services would be met with WTO Rules and large tariffs on EU goods and services, which would seean end to the EU's with it's £100 Billion a year trade surplus with the UK.
It also should be noted that Britain was never part of the Eurozone and did not have the Euro as it's currency, so even if we remained in the EU the chances are the same rules would be out in place for those in the EU but outside the Eurozone, and Euro-clearing was only allowed to continue in the UK after we won a Court Case against the European Central Bank (ECB) in 2015 when it was ruled that the ECB lacked the legal powers to enforce this, however further powers could easily be given to the ECB in the future, and the EU's eventual objective with regard to the Eurozone was layed bare well before the Brexit vote. At least if the EU attempt the same thing again they know they wouyld now lose much more money in relation to tariffs on goods and the end of a £100 Billion a year trade surplus, as if you can't have equivalecy, free trade, clearing and passporting in financial services, then why should you have it in terms of goods.
Fourthly the financial sector itself is going to change massively over the next decade with the rise of Fin-Tech and it should be noted that Fin-Tech just like the Financial Industry is global and borderless. Fin-tech will fundamentally change the banking and finance industry. Which is why so many tech jobs are now replacing financial jobs in London and why vast new tech company offices are being built as London diversifies. Trying to block the rise of FinTechs would be like the EU trying to block Google, Youtube, Facebook, Amazon etc, all of which work in an increasingly global borderless market place. Indeed having a little closed Eurozone market in a world where markets are increasingly global and borderless may end up being detrimental to the EU.
As for the Finance Industry even in the worst secario there would be few job losses with many top economists actually predicting it could be good for London.
Last edited by Brave New World; 12-17-2017 at 08:03 AM..
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