A senior manager told me that he believes Britain is right to ‘get away’ from the European Union (EU). This will free it (Britain) and allow it to grow faster. I disagree and told him that without a huge market (EU), who would be Britain’s new top few largest trading partners? Anyway, another colleague has just shifted her attention from sending her son to Australia and will instead send her son to the UK instead. The Pound has dropped significantly versus the weak ringgit. AUD has not moved up but Pound has really dropped significantly and I personally think come March 2017 when The UK Prime Minister Theresa May submits the application to exit the EU, it should drop further.
Of course, the negotiation between London and the EU may go extremely well and London gets back every advantage it once enjoyed without the burden of the immigration which was a requisite for all EU members. Some of you may be smiling now. Yes, I also do not think the negotiation will be smooth at all. Just google for some comments from some of the few stronger EU member countries to understand why. They are not going to make it easy at all even if they will face a women British PM.
As per an article in Reuters, following would be some of the potential happenings as per some bankers. UK Head of Citi said, “How do we and when do we start making decisions… knowing the plan is ready to go… it could be in the first quarter of 2017.” Rob Rooney, CEO of Morgan Stanley international warned, “It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long-term commitment to access the single market then a lot of the things we do today in London, we’d have to do inside the EU 27.” The chairman of the Lloyd’s of London insurance market John Nelson said, “We have to be careful that we keep the UK open… and making sure we are able to attract the right talent globally. If we don’t do that we will not remain the financial sector that we are today.”
This is not all. Take a look at what France would be doing on top of being expressive over Brexit. France offers help to banks considering Paris move after Brexit vote. Yes, they would love new banking jobs in France instead of Britain. They are not the only one. This is what Germany is doing. Germany considers changing labour laws to help woo banks away from London. Yes, both may stand to benefit when some of the banks move their operations away from London. This is what Russia controlled bank VTB is saying. Russian state-controlled bank considering alternative locations including Frankfurt, Paris or Vienna Please proceed to google for even more of such news. No now knows for sure what will happen until March 2017 application is submitted and negotiations start. Everything will be finalised only 2 years later after March 2017. So, for now we can consider all these to be mere rhetorics. Happy following.
written on 12 Oct 2016
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