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82. Brexit and the European financial system
- Author:
- Uuriintuya Batsaikhan, Robert Kalcik, and Dirk Schoenmaker
- Publication Date:
- 02-2017
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- London is an international financial centre, serving European and global clients. A hard Brexit would lead to a partial migration of financial firms from London to the EU27 (EU minus UK) to ensure they can continue to serve their EU27 clients. Four major cities will host most of the new EU27 wholesale markets: Frankfurt, Paris, Dublin and Amsterdam. These cities have far fewer people employed in finance than London. Moreover, they host the European headquarters of fewer large companies. The partial migra- tion of financial firms will thus have a major impact on these cities and their infrastructures. Banks are the key players in wholesale markets. United States and Swiss investment banks, together with one large German and three large French banks, will make up the core of the new EU27 wholesale markets. Some Dutch, Italian and Spanish banks are in the second tier. The forex, securities and derivatives trading markets are now in London. We map the current, limited market share of the four major cities that might host the EU27 client business. The expected migration of financial trading will lead to a large increase in trading capacity (eg bank trading floors). Clearing is the backbone of modern financial markets. A comparative overview of clearing facilities in the EU27 shows that Germany and France have some clearing capacity, but this will need to be expanded. The ownership of clearing is often intertwined with stock exchanges. Were the planned LSE-Deutsche Börse merger to go ahead, LSE would sell the Paris subsidiary of its clearinghouse. In terms of legal systems, there is an expectation that trading activities will be able to continue under English contract law, also in the EU27. A particular challenge is to develop FinTech (financial technology) in the EU27, as this innovative part of the market is currently based in London. We estimate that some 30,000 jobs might move from London to the EU27. This will put pressure on the facilities (infrastructure, offices, residential housing) in the recipient cities. The more the European Union market for financial services is integrated, the less need there will be for financial firms to move to one location, reducing the pressure for all facilities to be in one city (see Sapir et al, 2017, which is a companion piece to this paper).
- Topic:
- International Political Economy, International Trade and Finance, and Brexit
- Political Geography:
- Britain and Europe
83. Making the best of Brexit for the EU27 financial system
- Author:
- Andre Sapir, Dirk Schoenmaker, and Nicolas Veron
- Publication Date:
- 02-2017
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- The United Kingdom’s exit from the European Union creates an opportunity for the remaining EU27 to accelerate the development of its financial markets and to increase its resilience against shocks. Equally, Brexit involves risks for market integrity and stability, because the EU including the UK has been crucially dependent on the Bank of England and the UK Financial Conduct Authority for oversight of its wholesale markets. Without the UK, the EU27 must swiftly upgrade its capacity to ensure market integrity and financial stability. Furthermore, losing even partial access to the efficient London financial centre could entail a loss of efficiency for the EU27 economy, especially if financial developments inside the EU27 remain limited and uneven.
- Topic:
- Economics, International Political Economy, International Trade and Finance, Political stability, and Brexit
- Political Geography:
- Britain and Europe
84. Is Brexit an opportunity to reform the European Parliament?
- Author:
- Robert Kalcik and Guntram Wolff
- Publication Date:
- 01-2017
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- Brexit offers a political opportunity for the European Parliament to reform the allocation of seats to member states. This Policy Contribution explores different options for reform and their implications for equality of representation and distribution of seats to countries, within the constraints set by the EU treaties.
- Topic:
- International Organization, International Affairs, Political Theory, European Union, Democracy, and Brexit
- Political Geography:
- Europe
85. The Future Shape Of Europe: How The EU Can Bend Without Breaking
- Author:
- Dinah Pardijs and Almut Möller
- Publication Date:
- 03-2017
- Content Type:
- Special Report
- Institution:
- European Council On Foreign Relations
- Abstract:
- Faced with internal and external pressures, the EU is increasingly focused on “cooperation” and “deliverables”, rather than “integration”. ECFR’s research shows that a critical mass of countries agree on the need for more flexible cooperation within the EU.
- Topic:
- International Cooperation, European Union, and Brexit
- Political Geography:
- Europe
86. “Not Laughing Now”: Nigel Farage, European Identity, and Euroscepticism in the EU
- Author:
- Baronia Nitisha
- Publication Date:
- 03-2017
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- Due to economic, political, and cultural disparities between member states, the European Union (EU) has been unable to form a pan-European political and cultural identity. This has resulted in a long-term vote capturing opportunity for far-right political parties, which have brought Euroscepticism to the EU’s doorstep through election to the European Parliament (EP). Furthermore, because of their ability to emphasize these deeply rooted economic, political, and cultural disparities, far-right eurosceptic Members of European Parliament (MEPs) exacerbate Euroscepticism in a self-sustaining cycle that both internally and externally threatens EU legitimacy and, if left unaddressed, the very future of European integration.
- Topic:
- International Affairs and Brexit
- Political Geography:
- Europe
87. Programming Brexit: How will the UK’s IT sector fare?
- Author:
- Mikkel Barslund and Matthias Busse
- Publication Date:
- 06-2017
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- The British economy has always been able to rely on a continuous inflow of high-skilled workers from the rest of the EU and the UK is currently home to over three million EU citizens and. As a result of the UK’s decision to leave the European Union, however, the image of the UK in the eyes of foreign workers may have become tarnished. By using LinkedIn data, the authors of this study analyse the movements of IT professionals between the EU and the UK and thereby illustrate what is at stake for the UK, as exemplified by this particular ‘shortage sector’. LinkedIn data show that on an annual basis the UK gains over 6,000 IT experts more than it loses to the EU. Moreover, these mobile IT professionals tend to be much more qualified than domestic IT experts are. This reliance on the EU for IT recruitment – one in ten new hires comes from the EU – suggests that even if the UK is not aiming to restrict high-skilled immigration, curbing overall immigration could have unintended negative consequences for its capability to attract talented EU nationals in the future. The UK government should perhaps bear this in mind during negotiations with the EU27.
- Topic:
- Science and Technology and Brexit
- Political Geography:
- Europe
88. Brexit and the Challenge of Citizenship: British passports for EU citizens living in the UK?
- Author:
- Elspeth Guild
- Publication Date:
- 05-2017
- Content Type:
- Commentary and Analysis
- Institution:
- Centre for European Policy Studies
- Abstract:
- The task of finding a solution to the legal status of non-British EU citizens living in the UK after Brexit is exercising the best minds in the European Union at the moment. As the European Council (Art. 50) guidelines for Brexit negotiations rightly underline, “The United Kingdom's decision to leave the Union creates significant uncertainties that have the potential to cause disruption,…Citizens who have built their lives on the basis of rights flowing from the British membership of the EU face the prospect of losing those rights”. These guidelines also place special emphasis on the priority to ensure reciprocal guarantees in safeguarding the rights derived from EU law of EU and UK citizens and their families affected by Brexit, effective from the date of withdrawal. The latest idea floating in the media is that the UK should naturalise the non-British EU nationals living there (possibly numbering 3 million) as British citizens. This solution has been commonly called “giving them all passports”, but for an individual to qualify for a passport, s/he must hold the nationality of the state of issuance. Is this a serious policy option? It is certainly original and has the benefit of shifting the burden of dealing with this question back onto the UK – enlarge your population and keep good relations with your neighbours. But there are at least four challenging questions that deserve careful consideration.
- Topic:
- Citizenship and Brexit
- Political Geography:
- Europe
89. An Assessment of the Economic Impact of Brexit on the EU27
- Author:
- Michael Emerson
- Publication Date:
- 03-2017
- Content Type:
- Commentary and Analysis
- Institution:
- Centre for European Policy Studies
- Abstract:
- A team of economists at CEPS was commissioned by the Policy Department on Economic and Scientific Policies for the Committee on Internal Market and Consumer Protection to assess the likely economic impact of Brexit on EU27, together with some scenarios for the terms of the UK’s secession. For the EU 27, the losses were found to be virtually insignificant, and hardly noticeable in the aggregate. For the UK, however, the losses could be highly significant, with various estimates running up to ten times greater as a share of GDP. Impacts on some member states – in particular Ireland – and some sectors in the EU27 could be more pronounced than the average for the EU27. Michael Emerson is Associate Senior Research Fellow, Matthias Busse is Researcher, Mattia Di Salvo is Research Assistant, Daniel Gros is Director and Jacques Pelkmans is Senior Research Fellow – all at CEPS.
- Topic:
- Economics, Brexit, and Global Political Economy
- Political Geography:
- Europe
90. Reality bites: the Brexit negotiations seen from the other side of the Channel
- Author:
- Fabian Zuleeg
- Publication Date:
- 07-2017
- Content Type:
- Working Paper
- Institution:
- European Policy Centre
- Abstract:
- The Brexit negotiations continued this week with the UK government still insisting that the endpoint be an exit from the EU, including its Customs Union and the Single Market. But back in Britain, the turmoil is obvious, with different members of government taking diverging views, suggesting, at times, that a soft Brexit or a transition arrangement might be possible, even if it means concessions on the role of the European Court of Justice (ECJ), the exit payment, the rights of EU citizens and even (temporarily) continued freedom of movement of EU citizens.
- Topic:
- Europe Union and Brexit
- Political Geography:
- Europe