Stick or twist: Lon­don’s Brexit puz­zle

What will EU di­vorce mean for city’s sta­tus as a global fi­nan­cial hub?

China Daily (Latin America Weekly) - - 10 World - By JU­LIAN SHEA in Lon­don ju­[email protected]­nadai­

“The past is a for­eign coun­try: they do things dif­fer­ently there.”

That quote, from LP Hart­ley’s 1953 novel The Go Be­tween, was writ­ten about life in Bri­tain at the start of the 20th cen­tury, but could equally well be ap­plied to Bri­tish life in the days be­fore July 2016’s Brexit ref­er­en­dum.

Two and a half years on from the pub­lic vote for the coun­try to leave the Euro­pean Union, pre­dic­tions of politi­cians such as Liam Fox that Bri­tain’s fu­ture trade deal with the EU would be “the eas­i­est in hu­man his­tory” have proved to be spec­tac­u­larly wide of the mark.

Bri­tish pol­i­tics has been through a pe­riod of tur­moil un­prece­dented in liv­ing mem­ory, and with four months left un­til the sched­uled leave date, what will hap­pen and when is far from clear. But amid the con­fu­sion, the wheels of busi­ness and fi­nance con­tinue to turn.

Be­fore the ref­er­en­dum, Ger­many’s largest weekly pub­li­ca­tion, Der Spiegel, printed an ar­ti­cle en­ti­tled “Don’t leave us”, say­ing: “We need the Bri­tish ... be­cause they are part of the com­mu­nity of prag­matic, rea­son­able coun­tries and be­cause they are po­lit­i­cally, cul­tur­ally and eco­nom­i­cally sim­i­lar to us Ger­mans.” But the Bri­tish elec­torate thought oth­er­wise, so now Ger­many is look­ing after its own, par­tic­u­larly its fi­nan­cial sec­tor.

For years, the City of Lon­don has been the heart of world bank­ing, but now Ger­many’s own fi­nan­cial hub, Frank­furt, sees a chance to change this. In March, Chan­cel­lor An­gela Merkel formed a coali­tion with the So­cial Demo­cratic Party, un­der which they took con­trol of the min­istry of fi­nance, and woo­ing fi­nance houses away from Lon­don has been a pri­or­ity.

Merkel even plans to ease Ger­many’s tight em­ploy­ment laws to make the coun­try more at­trac­tive as a post-Brexit base. The Fi­nan­cial Times re­ports that a change to the ex­ist­ing law, seen as off-putting to some com­pa­nies, could be voted on next March — just in time for Brexit’s pro­posed date. Paris and Dublin are also keen to mus­cle in but Frank­furt is clearly in pole po­si­tion.

So where does this leave Lon­don, com­pa­nies based there, and their em­ploy­ees? In his ca­pac­ity as a lawyer and no­tary pub­lic with Howard Kennedy LLP, Tony Sa­muels has deal­ings with many of the city’s ma­jor fi­nan­cial in­sti­tu­tions. He re­mains con­fi­dent that Lon­don will sur­vive the chal­lenge to its No 1 sta­tus.

“I don’t think things will change at all for Lon­don,” he told China Daily. “Lon­don is the cen­ter of the fi­nan­cial world now and it will be go­ing for­ward, what­ever (Brexit) ar­range­ment hap­pens. We are es­tab­lished, have proved to the world we are re­li­able and we de­liver what we say, and the city will carry on and thrive what­ever hap­pens in the fu­ture.”

And for all the talk of ri­valry be­tween cities, Sa­muels said peace­ful co­ex­is­tence had been the past – and would be the fu­ture as well. “As far as I’m aware there is no ri­valry, if any­thing there’s a mu­tu­al­ity, where we have a need for one an­other, we use one an­other. Don’t ex­clude Berlin or even Dublin in this, I think there’s enough to go around for ev­ery­one.”

The past may be an­other coun­try. As far as Lon­don’s fi­nan­cial res­i­dents are con­cerned, the fu­ture might be as well — or maybe it will be a case of stick with what and where you al­ready know. The fi­nal out­come, like so many other con­se­quences of Brexit, re­mains to be seen.

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