Topics about the UK, EU and Europe. Article 50 (Brexit) formally triggered.
An impact of Brexit could be the loss of ” euro-denominated clearing” from London.
The future of an estimated 100,000 jobs has been plunged into doubt after a close political ally of the German chancellor, Angela Merkel, and president of the European commission, Jean-Claude Juncker, warned that a prized sector in the City of London must relocate to EU soil after Brexit.
Manfred Weber, the leader of the centre-right European people’s party – the largest political group in the European parliament, to which both the German chancellor and the commission president belong – told reporters that euro-denominated clearing could no longer be undertaken in the City when the UK leaves the EU.
“EU citizens decide on their own money,” Weber said during a press conference in Strasbourg on Tuesday. “When the UK is leaving the European Union it is not thinkable that at the end the whole euro business is managed in London. This is an external place, this is not an EU place any more. The euro business should be managed on EU soil.”
Such a development would be a huge blow to the British economy. Six months ago, the head of the London Stock Exchange, Xavier Rolet, said at least 100,000 positions could be lost if the City’s clearing houses lost their ability to process euro-denominated transactions.
Clearing houses are independent parties that sit between the two parties in a trade and are tasked with managing the risk if one side defaults on payment. London clears around three-quarters of all euro-denominated trades.
Brexit was always going to have some down sides for the UK.