Once upon a time, London was considered one of the major financial centers in the world alongside New York. However, since the UK’s Brexit vote in summer 2016, this status has recently been endangered. If no agreement is found between London and the EU by 29 March, the specter of a hard, disorderly Brexit could take shape without agreement.
Even today, more and more companies and banks are leaving the financial metropolis. They fear losing access to the EU internal and labor market in such a scenario.
Especially the FinTech sector groans these days under the uncertain future
For Brexit deters more and more financial talent to pursue careers in London. This is stated by British financial association TheCityUK in its most recent report.
Since the Brexit vote in June 2016, we have seen a remarkable drop in graduates, especially from France and Germany,
Although the British FinTech sector currently employs almost 60,000 people, about one fifth of whom are EU Member States. Today, however, employers would choose more in London than to move to the Thames.
Competition from the mainland – financial talent becomes a scarce commodity
Among other software developers, this mainly affects blockchain start-ups. Because here, apart from sectoral knowledge, technical know-how is in demand above all. In the future, this could be a scarce commodity, according to the report. For example, there is the risk that more financial experts will be leaving than can be compensated by their own training at home universities.
The current shortage of tech talent is a strategic issue for the UK financial and allied services industry
Nathan Bostock, UK managing director of Spanish banking giant Santander confirms the explosiveness of the situation. So far, however, too little was done to counteract the exodus.
In addition to Paris and Luxembourg, London is currently dominated by the blockchain hub Berlin. More and more start-ups are settling here to use not only secure access to the EU internal market but also the free labor migration of the Schengen area. Unlike in London, financial talents from the European neighborhood do not have to fear any restrictions here.
Brexit: The state of affairs and how it should go now
These days, Brexit’s project of the century long ago resembled the squaring of the circle – the seemingly endless negotiations seem so chaotic, London’s domestic positions seem incompatible with the ideas from Brussels and Strasbourg.
After last week’s rejection by the British Parliament of the latest status of the previously negotiated exit agreement, the official divorce date is now on 29 March.
In order to be able to start a well-ordered future in a common future, London is making a final effort this week. As her spokesperson confirms, British Prime Minister Theresa May asks EU Council President Donald Tusk to extend the deadline and postpone the Brexit deadline until the end of June.
Tusk, on the other hand, demands from the British Parliament that it approve the withdrawal agreement beforehand. Already next week should therefore come to a third, politically controversial vote in the British lower house.
However, the EU summit in Brussels on Thursday, 20 March, could decide on possible concessions. For a postponement as demanded by May all Member States must unanimously approve.
The fact that the heads of state and government of the 27 member states would grant a short grace period has so far been considered almost certain. However, there is resistance from the EU Commission: Commission President Jean-Claude Juncker reiterates that the EU will make no further concessions in view of the joint agreement. The negotiations were completed. For the summit, he does not expect any decision on the delay.
Even without hard Brexit: exit is a loss business for London
Should a solution be found in the upcoming negotiations, the economy in both the British Isles and on the Continent will breathe a sigh of relief. However, this will not change the trend of emigration and the first relocations from London to mainland Europe. Whether with or without agreement – for the financial center, the withdrawal already means losses today.