While the fishing sector and state subsidy principles are taking center stage in discussions about a post-Brexit trade deal, the near future of another very important sector hangs in the balance.
The UK doesn’t longer have the automatic right to market its services across the EU following the transition period ends on December 31.
The business is hugely important to the UK’s fiscal health: it created up 6.9percent of economic output in 2018.
In its center is London, Europe’s leading financial center and a world pioneer in the financing, foreign exchange, insurance, and reinsurance.
Experts say many European nations and businesses have relied on their own financial services experience through time.
Thus, is there a different European center prepared to shoot London’s location?
“You do not build up the sort of ecosystem and infrastructure that we have at London overnight,” Professor Barbara Casu, manager of Cass Business School’s center for banking study, informed Euronews.
“It is likely to take a long time. The European financial centers, all these are still fairly small; Frankfurt, Dublin, Paris, they’re not competing.
Not only for fiscal services.
“If you’re buying a business somewhere in Europe and you want a lot of attorneys, accountants, bankers, and advisers, you visit London and you also receive all the services,” explained Thomas Wieser, an American-Austrian economist.
“If you must do this from the continent, you would say:’Where can I get the men who create my contract? Oh, they are sitting in London’.
Regardless of London’s standing, Brexit has intended companies that have moved $1.3 trillion in funds and 7,500 jobs into the European Union, based on Ernst & Young.
Together with the transition period ends soon, the UK will make its own rules for the financial services sector instead of subsequent European ones.
The EU is helpless to prevent this, even though it might prevent its companies from using services that don’t live up to European standards.
What will the effect be on European companies?
“Big companies can get fund in New York, they could increase finance in Singapore,” stated Casu. “The smaller companies, these are likely going to find it more challenging to get the sort of bandwidth they have been used to.
“And when businesses can not get financing, they won’t invest and if they can not invest they will shrink and also make people redundant.