It has been made abundantly clear from the EC (which is based in Brussels, but isn’t the overarching nerve centre of the Federal European super state which only exists in their fevered imaginations) and the heads of national government that the UK’s continuing access to the single market comes at the price of acceptance of the rights of EU citizens to live and work in the United Kingdom and contribution to the common coffers.
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Britain is yet to trigger Article 50 of the EU constitution, which would effectively rubber-stamp its intention to leave the bloc, but the pressing concern for worldwide lenders is to ensure they retain access to the European banking passport system.
“Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the EEA”, Jens Weidmann said on Monday (19 September), while speaking to a number of European newspapers.
In an interview with a United Kingdom newspaper, the German central bank boss and European Central Bank Governing Council member said London’s position as a global financial center could be at severe risk if the British government fails to negotiate a deal to remain within the European Union’s single market.
Jens Weidmann, the president of the Bundesbank, said in a Guardian interview that without passporting rights London’s position as a financial centre would be jeopardised.
Currently, membership of the single market is conditional upon states accepting free movement of labour, one of the EU’s founding principles.
He said he expected some businesses to reconsider their London location after the country does leave the European Union, and relocate to another financial centre within the trading block such as Frankfurt, but he does not anticipate a mass departure. However Moody’s concluded it “would likely be manageable in terms of credit fundamentals, absent any other shocks”.
Were that to happen, he said “several businesses” would reconsider the location of their headquarters.
“As a significant financial centre and the seat of important regulatory and supervisory bodies, Frankfurt is attractive and will welcome newcomers”, the European Central Bank rate-setter told the Guardian. “This is credit negative but manageable”, the ratings agency said. “The greater impact would be felt through higher costs and diversion of management attention, as the companies concerned restructure, reducing profitability for a time”.
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Amid growing calls for more details on the Government’s Brexit strategy, Downing Street on Saturday poured cold water on claims Mrs May told one of Brussels’ most senior figures that she wants to trigger the formal process to pull Britain out of the European Union early next year.
