The new novel by the British writer Julian Barnes about the Belle Époque shows astonishing parallels with the present. A conversation about romantic love, cheaters and the unspeakable Brexit.
SZ: In 2015 you saw a painting by John Singer Sargent in the National Portrait Gallery in London, which caught your interest. It was called: “Dr. Pozzi at Home”. Can you describe what fascinated you about it?
At the eastern end of the border between the two Ireland, Lake Carlingford acts as a natural bulwark between the two parts of the island. On one side, the Morne mountain range and its glowing vegetation; on the other, the grove at the foot of the Cooley mountains – two areas classified for their exceptional landscapes. “Here you have Europe, and there it is the United Kingdom”, explains Adrian O’Hare, retiree living in the region. He regrets the decline of his adopted town, Warrenpoint, “Once one of the finest Edwardian seaside resorts! “.
Belfast, Larne and Warrenpoint: the three ports where controls will be carried out
The partition of Ireland, the Civil War, the shutdown of the railroad have dealt a blow to this small Northern Irish container port: there are only two hotels left in town, where many buildings are to be found. abandonment.
“Policymakers don’t want to invest here. They consider it a risky area, not politically stable enough. There is no longer any hard sectarianism but the mistrust continues “, continues Adrian O’Hare. Like many in communities on the Irish border, he feels abandoned by decision-makers. However, with Belfast and Larne, his city is one of the three ports in Northern Ireland where customs and health controls are now installed.
→ REPORT. Brexit, day 1: in Northern Ireland, “the world will not stop turning”
For four and a half years, the border has been a major preoccupation in the negotiations, even the sine qua non of an agreement. With Northern Ireland remaining in the European common market, customs and health controls were inevitable – but where to put them? Faced with the impossibility of building infrastructure on the old land border, the choice fell on the ports.
“These new controls will cost time and money”
“Here it is, the famous border of the Irish Sea”Jim Boylan jokes, pointing to the terminal. A ferry is docked, and a few boats anchor at the foot of the cranes. For now, everything seems frozen. Two rotations are made each day to Heysham, in Great Britain: gas, peat, waste and goods arrive and leave discreetly. “These new controls will cost time and money”Jim adds.
“Obviously, Westminster will send resources to finance them, but not to save the city”, regrets Adrian. Both campaign to build a bridge between the shores of the lake, in order to unify the area, facilitate passage and bring back tourists. The project has raised the interest of the Irish government. “Brexit will strengthen relations between North and South, so it is an urgent project! “
In Belfast too, the first boats arrived safely: between the wave of storage generated by the end of the transition period and the traditional calm of the holidays, the first days of the year were peaceful. Especially since Northern Ireland benefits from grace periods: the certificates to be provided will not change for three months for food products – six for raw meat products.
In the Republic of Ireland also, the authorities of the port of Dublin rather expect traffic jams as soon as they return to normal flows. And it is for the time being in Rosslare, 180 km further south, that the changes are taking place: a new link now links this port to Dunkirk. A twenty-four hour journey, but which bypasses Great Britain, its new regulations, its additional costs and its delays.
FFor the banks and the institutions active in the financial market, the UK’s exit from the EU is still far from being ticked off. Rather, it feels like a hard Brexit, said Andreas Krautscheid, General Manager of the Association of German Banks (BdB), at the annual conference call to journalists. Although the future economic and trade relations between the EU and Great Britain were contractually regulated shortly before the Brexit, which took place at the turn of the year, the financial sector of all things was left out.
The financial center of London plays a key role for banks, including those based in continental Europe. For example, London is the most important location for Deutsche Bank after the Frankfurt headquarters, because this is where the investment bankers who are crucial for earnings are at home.
So it is not surprising when BdB General Manager Krautscheid calls for the most generous possible solution in favor of London in the negotiations that are now beginning for an agreement on financial services. After all, Deutsche Bank is the most important contributor to the banking association, and its chairman Christian Sewing will take over the office of bank president from Hans-Walter Peters on April 19 on Bank Day.
Krautscheid spoke out in favor of a large number of equivalence solutions. This means that the British regulations are recognized as equivalent to the continental European ones. This means that London-based institutes can continue to offer their services in the EU. But there are concerns that Great Britain wants to strengthen its financial center and therefore introduce more generous supervisory rules. The financial center of London contributes around 7 percent to Great Britain’s annual economic output. In addition, the principle of equivalence is not comparable to the EU passports that were in place before Brexit. Because these related to significantly more products. The equivalence rules can also be canceled by the EU Commission at any time, especially if London relaxes the reins on banks.
“The British supervision is not a dumping supervision,” said Krautscheid. But the latest statements by the Governor of the Bank of England, Andrew Bailey, suggest that impatience is growing in London too. It is better to forego full access to the EU market after Brexit than to be degraded to the “rule taker”, he said at the beginning of January. According to Bailey, Great Britain has already made 17 equivalence decisions for institutions from the EU, while conversely there are not even a handful of a total of 40 topics.
Krautscheid fears that many shops and services could become more expensive if there is no solution in favor of the broadest possible market access. The EU stock exchange and securities regulator Esma is also tightening the reins. It has now warned banks and fund managers not to use tricks to circumvent the new requirements that will apply after Brexit.
The last-minute deal with the EU at the end of the year seemed to have settled everything – but now Brexit is massively hindering the exchange of goods with Great Britain. The first logistics groups cut back their transports drastically. The customs bureaucracy is obviously to blame. .
EU chief negotiator Michel Barnier takes stock, defends the border controls – and makes no secret of the fact that he would have found it more sensible if Britain had stayed in the community.
Björn Finke, Brussels
The task is not yet completely done: EU chief negotiator Michel Barnier and his British counterpart, Lord David Frost, agreed on a trade agreement on Christmas Eve. Without that, tariffs between the UK and the EU would have had to be introduced at the turn of the year. Because then ended the Brexit transition phase, during which the kingdom remained in the EU internal market and the customs union. But Barnier is still busy with Brexit. The 70-year-old Frenchman is discussing the treaty with EU governments and MEPs during these weeks. The parliamentarians have to approve the agreement by February or March. In a video interview with the Süddeutsche Zeitung and some foreign media, Barnier looks back – and forward.
In the Titanic district of Belfast, the orange of the sky is reflected in a sea of oil. On the old docks that saw the construction of the giant ocean liner at the turn of the last century, clusters of children try out their brand-new bikes and scooters. On Thursday, December 31, at 11 p.m., the United Kingdom left the European Union. A bitter day for Northern Ireland which voted 55.8% against Brexit.
A six-week lockdown and a curfew have emptied the city of its young people, but families intend to take advantage of the slightest ray of sunshine. Maria, in her forties, Philadelphia Eagles beanie pulled over her ears, shrugs her shoulders. “To be honest, I don’t understand a thing”, admits this saleswoman in a cosmetics store. “I still don’t know how it will affect my work. However, things are bound to change because we have European and British clients. “
“It’s a sad day, because we are European! “
The lack of clarity annoys him: “To believe that the government leaves us in the dark so that we can make mistakes and get fines!” “. But the prospect of having to apply for a visa to enter Europe leaves her unmoved: like 700,000 North Irish people, she holds an Irish passport which allows her to travel and work freely in the 27 countries of the Union. .
At the end of the pier, you can see the port. Huge cranes are busy there to unload the cargo ships. Not far away, the ferry terminal welcomes the few passengers from Scotland and Liverpool. “Yesterday, we were on a bench watching the boats coming from Sweden, Germany… I can’t help but think that it will be more complicated now”sighs Pol, who works at the local university. “It’s a sad day, because we are European! “
His mate, Colum, nods. “Being part of the EU made us feel more important than just being Northern Irish, he slips. People here tend to be islanders, and if they stay together it all ends up revolving around the question of Irish or British identity. We have just lost something important, all for a vague ideal of British sovereignty. “
The fear of the reawakening of “old wounds between Catholics and Protestants”
Like many, Colum is concerned that the new deal will “Awakens old wounds between Catholics and Protestants”. Because, if the former want the reunification of the Emerald Isle and are delighted that the land border remains open, the latter are worried about seeing their privileged relationship with Great Britain undermined by controls at sea. Ireland. “We still have hope”, tempers Pol. “Whatever happens, the world will not stop turning, the business will continue and we will always have the opportunity to go on vacation to Spain or France! “
At 19, Karl Duncan shares this optimism. Committed to the Social Democratic and Labor Party (SDLP), he wants to imagine a future where “Prosperity would replace divisions”. Too young to have voted in the referendum on Britain’s exit from the EU, he has followed the negotiations closely. “Much has changed in the past four years: the political scene has changed, in the south and in the north of Ireland. “ Thanks to Brexit? Maybe, he admits, even though he’s fiercely opposed to it. “I especially have the impression that we are at a turning point in our history”, he rejoices.
On the docks, the museum dedicated to the rutile Titanic, opposite the ultramodern studios that hosted the filming of the successful series Game of Thrones. Two projects which have participated in the transformation of the city, since the Peace Agreement of 1998. If pragmatism prevails today, who knows what new industries will complete this district in the coming years?
EThere are things you couldn’t have guessed in 2019 when this series first aired on the BBC. That Theresa May would be substituted for Boris Johnson before Brexit, and that Donald Trump’s presidency will end with such a bang as we have just seen. And the global pandemic came as a bit of a surprise. Although the series “Years and Years” is set in the very near future, namely the years after Brexit, a few basic parameters are wrong. But that doesn’t matter, because it’s mainly about the everyday life of the extensive Lyons family from Manchester and the consequences that the events in a dystopian Great Britain have for the four siblings and their bossy mother Muriel.
The protagonists were sorted surprisingly quickly: the eldest son Stephen is a financial advisor, married to the accountant Celeste, they have two adolescent daughters. Daniel is gay and works at the housing office, among other things, he is responsible for refugee accommodation and falls in love with one of his protégés. Rosie organizes a school cafeteria, is a single mother of two sons and despite being in a wheelchair she has most things under control except her dating life, which is mostly not her fault. Edith, on the other hand, is busy saving the world and usually only calls in via Skype from somewhere in Asia.
The technology that everyone has at their disposal and through which they communicate is a matter of course in every household. An “Alexa” -like device called “Signor” can be addressed at any time and creates family group calls, of course everyone has mobile phones, of course nobody goes to the bank, but looks at the account at home. And while grandmother Muriel is still struggling with the title of the digital household appliance, daughter Beth already has wonderful filter nonsense with which she drives her parents crazy.
A wonderfully unsympathetic Emma Thompson
This could go on as a less exciting family series, but unfortunately a lot is happening in the world. The nuclear attack that Donald Trump instigates on an artificial Chinese island in his second term in office is still quite a long way off. The economic effects of a financial crash in the UK in 2026 are already much more palpable. Emma Thompson as populist politician Vivienne Rook, as a wonderfully unsympathetic but charismatic mixture of Marine Le Pen and something even worse, pushes through drastic measures after her election as Prime Minister in the country. The climate is changing a little faster than expected, and technical developments are also making a few giant leaps. If one does not apply the laws of historical probability to the series, but rather those of dramaturgical condensation, these tricks can be well justified.
The cultural zeitgeist has also advanced further in a few years and with it the self-perception of the characters. We, the audience, didn’t quite come along, of course – and not alone, because the older generations aren’t up to date either. This is negotiated in the storyline about daughters Bethany and Ruby, in which Beth comes out as “trans”. While the parents are still pleased with their tolerance and ponder which pronouns to assign to Beth in the future, the daughter explains that she is not transsexual, but that she identifies as transhuman, i.e. that she cannot cope with the entire body as a biological entity and becomes digital would like to. The still so understanding mother Celeste freaks out in her helplessness, then a negotiation is made as to how far the daughter can go – as any family in the world would do at any point in time. The fact that this story is not used as a special effect to create a science fiction impression, but rather tells with a lot of seriousness and empathy how a young adult wrestles with her self-image, defines the quality of this series.
Unfortunately, the synchronization has to be mentioned separately, and here it is a matter of principle. Why do they all sound like cartoon characters? Who told the speakers that uninhibited overacting was just good enough? If the voice doesn’t roll over regularly, if it doesn’t nölt and rattle and the sentence melody doesn’t sound like a worn out cassette in a Walkman with weak batteries, then the director doesn’t seem to be waving through. As a viewer of the German version, it is not easy to find the character under the thick layer of blurring and nagging and croaking who, by the way, speaks quite normally in the original version, with a Northern English touch, as the people speak. Most of the time you will find them much more personable. In case of doubt, a little less stage emphasis would have been more, and unfortunately this series is not an isolated case. If you can somehow, you don’t do it to yourself, but watch the original with subtitles, it spoils everything else.
Years and Years, on Thursday from 8.15 p.m. to 2 a.m. on ZDFneo (and in English on the Starzplay channel on Amazon Prime)
The recently deceased, John le Carré, explored the moral ambiguity in his novels, whether they were the spy plots in the Cold War of its first stage or the latter, with various scenarios, that the novelist wrote when he expressed anger in interviews or public interventions pure, wise but youthful, against the injustices she perceived in her country or in the world.
A year ago, at the award ceremony, in Stockholm, of the Olof Palme Prize, in memory of the Swedish statesman, he revealed the internal source of that obsessive theme of his novels. When he was offered the award, his first thought was: “I am not a hero, I am an impostor.” But later in the speech he spoke about Brexit without tolerating a speck of doubt.
«I am not simply in favor of permanence. I am absolutely European and the rats have taken control of the ship- he read-. It breaks my heart and I want to break yours. We need your voice to wake us up from this sleepwalking walk and save us from this gratuitous act of political and economic self-harm. But you are too late.
Would citizen Le Carré accept the possibility that Boris Johnson “heal now the divisions” caused by ‘Brexit’, as urged by Robbie Gibb, columnist for ‘The Daily Telegraph’? It seems unlikely if he would be resurrected, given his fury when he was alive. Nor does it seem possible in the case of Hilary Mantel, author of a highly successful trilogy about the court of Henry VIII in the 16th century.
In the list of recalcitrant supporters of permanence that has drawn up ‘The Daily Mail’ – another newspaper that, like the ‘Telegraph’, has spent decades publishing negative news about the European Union – Mantel is quoted describing ‘Brexit’ as’ a singular national madness ». He would have understood it as a retreat from ‘Britain’ to insularity, something ‘really ugly’.
There are few prestigious writers who have raised their voices in favor of the British march on the EU. Julian Fellowes, author of the series ‘Downtown Abbey’; customs and entanglements in a large mansion where aristocrats and servants coexist, at the time of the decline of the Empire. For him, ‘Brexit’ “is a philosophical question, it is about democracy against autocracy.” The EU would be ‘undemocratic’, an Austro-Hungarian Empire on the brink of bankruptcy.
Perhaps James Rebanks could reunite those mentioned. Farmer and rancher in the Lake District, in ‘La vida del pastor’ and ‘English Pastoral’ (English Pastoral) tells the story of his family and his region, labors and frustrations, his desire to create a more natural farm in the face of devastation caused to the landscape or fertility by methods developed to lower the price of food at all costs.
Future of Tombs
The evolution of Rebanks in the ‘Brexit’ was an initial surprise when he discovered, in 2016, that many of the young farmers and ranchers he knows were going to vote in favor of the EU march and against the opinion of their national association. They believed that the Common Agricultural Policy benefits the big ones and paralyzed the changes that would benefit them.
The outcome is a Rebanks horrified at the possibility that the separation would be made without an agreement and the tariffs would ruin it. He distrusts the Government, which has continued community grants but does not clarify the future. The Cumbrian mountain farmer and best-selling author fears he will push for further liberalization, which he sees as ecologically catastrophic.
Neither novelists nor shepherds have the floor when historians trace the evolution of peoples and states. In this area, reconciliation seems even more unlikely. For David Edgerton, professor at ‘King’s College’, author of ‘The Rise and Fall of the British Nation in the 20th Century’. “The only good thing about ‘Brexit’ is the bonfire of national illusions that will burn soon”.
Robert Tombs is an eminent specialist in the History of France and the most recent author of ‘The English and their History’, in which England, the leading voice of ‘Brexit’ in the United Kingdom, soon emerged with original features in its laws and systems of government that would make it a European pioneer of the democratic idea. Tombs is pure ‘Brexiter’.
“At first glance, the agreement seems to cover the essentials,” he wrote. We will not be subject to EU law. We will not be vulnerable to unilateral economic blackmail. Even our fishing industry will have a chance to revive. We will be free to divert trade with the EU to more profitable regions, as has been the case for twenty years. We cannot blame anyone for our shortcomings. It is the end of the beginning. What comes now will be even harder.
The sky is gray and the air freezing. A typical winter day in a way, aligned with the mood of most Londoners at this very special end of the year. On Wednesday, December 30, Members of the House of Commons incorporated the free trade agreement with the European Union into British law. A massive vote: 521 deputies for, only 73 against.
“I hope that this vote, the penultimate day of the year, will put Brexit behind us and that we will stop hearing about it,” explains Laurie Young, 42. This resident of Islington, a district in the north-east of the English capital, has “Tired of these pseudo sterile and passionate debates where everyone stands in their positions and listens to no one.” The resulting divisions have done more harm than Brexit itself ”.
Only 9% of Britons expected MPs to oppose the deal
More than four and a half years after the referendum on June 23, 2016, this feeling of Brexit overflow is shared by an overwhelming majority of the population. Even though only 17% of Britons believe that the agreement negotiated by Boris Johnson is good, 57% of the population wanted parliamentarians to ratify it, according to a poll released Wednesday by the YouGov institute. Only 9% expected MPs to oppose it. For the British, it is clearly time to turn the page.
→ ANALYSIS. Brexit: a consensus emerges in Westminster
Especially since another subject affects their daily life much more: Covid-19. Since the discovery of the new variant of the virus, entitled VUI-202012/01, whose transmission is much easier than for the previous variants, the country is crumbling under positive cases: the number of new patients has tripled since December 3 if although 50,023 Britons tested positive on Wednesday, following Tuesday’s record 53,135 positive cases. A total of 2.4 million Britons have contracted the disease.
“Brexit is for newspapers and politicians”
For Christine Lewis, a retiree, this is where the center of her current concerns lies. “Brexit is for newspapers and politicians, it won’t change my life, she assures. Whereas because of the virus I cannot see my children and my grandchildren. “ If she and her husband are relatively protected by their isolation in their social housing, their life seems much less enjoyable without the laughs and smiles of their grandchildren, without their traditional Christmas lunch, without the presents to unwrap.
→ DOSSIER. Brexit seen from London
Despite the inoculation of 786,000 doses of the vaccine in three weeks, improvement does not appear for tomorrow. On Wednesday, December 30, the containment measures were tightened for almost the entire population. Since then, non-essential stores have been closed across the country. The only exception: the Isles of Scilly, the extreme tip of Cornwall, whose 2,224 inhabitants are the only ones in the country, allowed to go to the pub… to celebrate D-Day in the world after Brexit.
London For the London financial industry, 2021 started with a shock. Around six billion euros of daily trading volume migrated from London to Amsterdam, Paris and other EU locations on the first trading day of the year. The British financial center lost almost half of its stock trading in one fell swoop.
“A spectacular own goal,” said Alasdair Haynes, head of the London stock exchange operator Aquis Exchange, to the financial service Bloomberg. Europe has clearly won the battle for stock trading. David Howson, president of competitor CBOE Europe, agreed: “EU equity trading is gone and will not come back.”
That the loss was not unexpected is little consolation. It is the most visible price for Brexit to date. Although the market turmoil feared by some did not materialize, the mood in the banks and fund houses is depressed.
From the EU perspective, Great Britain has been a third country since the New Year. And the Commission in Brussels has resolved to strengthen its own capital markets at the expense of London. EU market participants are therefore only allowed to trade shares in European companies within the EU. Parts of the derivatives trade have also shifted – to the EU and to EU-equivalent locations such as New York.
For the “City”, as the London financial sector is called, Brexit means the most radical change since then Prime Minister Margaret Thatcher unleashed the financial markets with the “Big Bang” in the 1980s. Deregulation was followed by a decade-long boom that catapulted London into a league with New York. In the Docklands, Canary Wharf was a new, glittering banking district that expressed London’s new role.
Government spreads optimism
Is the decline now beginning under Thatcher’s successor Boris Johnson – or will Brexit trigger the next wave of liberalization? Opinions differ in London. The government is spreading optimism. In a video link with managers last week, the prime minister assured that the financial sector is of strategic importance and that everything will be done to promote it.
Finance Minister Rishi Sunak even speaks of the “Big Bang 2.0”. Brexit will strengthen London as a global financial center, he says. You can do things differently and better now. He wants to make London a Mecca for fintech companies and sustainable financial products.
Some hedge fund managers are calling for the city to be transformed into a “Singapore on the Thames” and for companies to be attracted with low tax rates. However, that is unlikely. For one thing, the government cannot afford major tax cuts because of the huge corona deficit. Recently there has been speculation about an increase in corporate and capital gains tax. On the other hand, there is a lack of political will for radical deregulation.
Instead, the government is considering just turning a few screws:
There are discussions about lowering the minimum IPO requirements to attract more foreign companies to the London Stock Exchange. In the future, companies could only list ten percent of their shares on the stock exchange – instead of the previous minimum share of 25 percent. However, the proposal is highly controversial among London’s institutional investors because they fear for their rights.
The British government wants to allow trading in Swiss shares again in the first quarter – and thus partially offset the loss of EU share trading. In the summer of 2019, the EU withdrew its stock exchange equivalence from Switzerland in a dispute over an economic framework agreement. Since then, Swiss shares have no longer been allowed to be traded in the EU. London and Zurich now want to recognize each other as equals again.
Following the example of Dublin and Luxembourg, the government could make investment funds tax-neutral in order to attract more funds to London and prevent fund managers from migrating to the EU.
In the longer term, the abolition of the maximum bonus for bankers would also be conceivable. This was introduced by the EU after the financial crisis in order to contain excesses. From a banking perspective, it only increases the fixed salaries and thus the operating costs. Such a gift to the banks would, however, be unpopular among the population – and from the government’s point of view in the midst of the economic crisis it would also send the wrong signal.
These possible innovations pale next to the disadvantages that Brexit brings. On New Year’s Day, the British financial service providers lost their “passporting” rights. Before that, they could travel freely in the EU and offer their services. Both are no longer automatically allowed. The qualifications of lawyers and consultants are also no longer automatically recognized. The professional groups must now seek national licenses in each EU country in which they want to operate.
Resources in Europe are being redistributed
The result is a redistribution of work within Europe. Bank employees are only allowed to serve their EU customers from their branches in Frankfurt, Paris or other European financial centers. For example, if a London broker wants to call a European customer, he has to ask a colleague from an EU office to do so.
The companies have therefore already increased their offices on the European mainland before Brexit. So far, 7,500 jobs and £ 1.2 trillion assets have moved from London to the EU, according to consultancy EY. Further relocations are expected.
European customers could only be served from London again if the EU Commission classifies the British regulations as equivalent. Depending on the count, there are up to 40 separate equivalence decisions for different financial areas such as trading venues, asset managers, investment banks and clearing houses.
It is the same legal framework that financial firms from other third countries such as Switzerland, the USA or Japan work with. The disadvantages: The EU can terminate access to the single market at any time within 30 days. And only a limited number of services are covered. There is no equivalence for insurance or the traditional bank lending and deposit business.
EU is delaying equivalence decisions
From a British perspective, this system is therefore suboptimal. The government is pushing for a more binding agreement with more say. In the free trade talks that ended at Christmas, the financial sector was left out. However, it has been agreed to sign a “Memorandum of Understanding” on future cooperation by March.
The expectations of the paper are low in London. In the best case scenario, they will agree on a few principles for regulation, says Andrew Gray, partner at the consulting firm Pricewaterhouse-Coopers (PwC). However, he does not expect a timetable for the equivalence decisions of the EU Commission.
Since the British set of rules is currently identical to the European one, there is no reason in terms of content to refuse recognition. However, the Commission is in no hurry: it wants to reduce the dependence of the European capital markets on London and guide further activities into the EU. She officially justifies her waiting by saying that she first wants to see the British future plans before she can declare London to be equivalent.
Bank of England: Equivalence would be better for both sides
This argument is “problematic”, criticized Andrew Bailey, Governor of the Bank of England recently. After all, rules on both sides would constantly evolve. He pointed out that Great Britain had already made 17 equivalence decisions for companies from the EU. Conversely, the EU has only recognized two areas so far, including the systemically important clearing houses.
“It would be better for both sides to have equivalence because open markets are advantageous,” said the British central bank chief. But if the EU imposes too many conditions, “we cannot get involved”. Great Britain could not be permanently bound by EU rules, but must have autonomy in the key sector.
Most British firms have already established themselves in the new world. No further equivalence decisions are expected from the EU for the time being, says Conor Lawlor from the UK Finance Association. “Companies can be successful without equivalence,” says Gray. The transition since the New Year went smoothly because the companies were well prepared. But the duplication of structures and the fragmentation of the markets will cause damage.
PwC puts the overall economic costs at 1.3 percent of gross value added for Great Britain and 0.3 percent for the EU per year if the current situation persists.
An imminent change of heart in Brussels is unlikely. “The EU only grants equivalence if it is in its interest,” says William Wright of the New Financial think tank. There is an 18-month permit for London clearing houses because there are no alternatives in the EU. However, this equivalence will also end as soon as enough capacity has been built up on the mainland.
From Wright’s point of view, one advantage of Brexit is that the European Capital Markets Union is now being accelerated. “The Brexit and Corona have created new pressure to act in the EU,” he says. The European capital markets are underdeveloped and only account for 87 percent of economic output. In London they correspond to 171 percent of economic output so far.
Moving capital and expertise will narrow the gap, says Wright. For London, however, he does not see black: the city is big enough to cope with some losses.
More: Brexit bureaucracy is wreaking havoc in UK businesses.