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Hoping to understand if I Brexit negotiations will have positive results this week, fromEU harsh words have come against London.
Specifically, rumors have leaked about the possibility of excluding the financial system from the United Kingdom of the Community market if the transition conditions dictated by Brussels are not respected.
The tense climate and complexity of a deal could cost the UK dearly when it comes to financial assets. There Brexi is jeopardizing the stability of Johnson and the entire country: what to expect in the short term?
Effect of Brexit on finances: no discount for the UK
The latest statements by Mairead McGuinness, Commissioner for Financial Services in Brussels, continue to open up gloomy scenarios for the UK.
Brexit, which is increasingly becoming a minefield for London, could turn into a nightmare for UK financial companies.
The transitional system that will be activated after December 31, pending the final “divorce”, will allow companies UK financial services do business with the equivalence system.
However, as McGuiness explained, the operating framework for British companies will change and London may find itself isolated from financial activities:
“Will not be as usual because in any case UK financial services companies will lose their financial passport privilege… if guaranteed equivalence in a given area, this must be accompanied by commitments not to deviate from the European framework in the period covered by the equivalence “
A pretty clear message for Johnson: no violation of the rules in force in Brussels will be tolerated. Free trade will always be guaranteed, but the EU seeks to assert its interests.
Escape from London for financial companies
Meanwhile, the price paid by the UK up front Finance it may already be very expensive. Brexit, in fact, is having its effects on companies operating so far in London and across the country.
The companies have transferred around 7,500 employees and more than £ 1.2 trillion ($ 1.6 trillion dollars) of activity in the European Union before Brexit, which is more likely to continue in the coming weeks.
Just in the last month, around 400 relocations, according to a consulting firm that tracked 222 of the largest financial firms with significant operations in the UK.
Since the nation voted to leave the EU in 2016, the financial sector added 2,850 jobs in the Union, with Dublin, Luxembourg and Frankfurt posting the highest gains.
Starting next year, companies in the European financial capital will lose their passport to offer services in European countries. They will have to rely on so-called equivalency to do business with EU clients, who account for up to a quarter of all revenue in London.
With Europe far from being sure of guaranteeing such access, companies must strengthen their continental presence.
The Brexi presents increasingly complex scenarios for the United Kingdom, already tested by the collapse of GDP and poor employment forecasts.
