The pace of collapse seems to be accelerating – and the commercial consequences for the UK may well intensify correspondingly, especially for the City of London.
The timeline of the divergence between David Cameron’s attitude to the EU and mainstream EU opinion stretches back at least a decade. The enduring characteristic of the `Cameron policy’ is a lack of strategic thinking about the longer-run implications. Instead, he seems to focus on the immediate short-run benefits:
1. Leave EPP – May 2009 ahead of EP election.
2. Veto a Treaty – December 2011: Subsequently, TSCG was signed on 1 March 2012 and now ratified by 25 EU States
3. Attack on free movement of persons – November 2013 onwards
4. Short–selling -January 2014: action dismissed by ECJ.
5. FTT – April 2014: action dismissed by ECJ
6. Veto Juncker – June 2014 onwards: Juncker is now President of the Commission
7. Surcharge – October 2014: Was it really `halved’?
8. Bankers Bonus - November 2014: action dismissed by ECJ
9. The United Kingdom versus ECB on CCPs – perhaps in May 2015?
For the financial services industry, the real commercial problem is now looming. With UK political clout minimal, the Government is resorting instead to suing the rest of the Members in the European Court of Justice (ECJ). So far, the UK has failed in every financial services case – with its arguments almost entirely rejected. Reading the ECJ decisions, even a layman can understand why the flimsy arguments have been rejected. However, the most significant ECJ case is yet to come. In September, I explained that the ECJ will pronounce judgment on three cases brought by the UK Government against the ECB on the location of CCPs. (European Court of Justice: The United Kingdom versus ECB on CCPs)
British business now faces an excruciating dilemma: should it support its traditional political ally (the Conservative Party), or the Labour Party, do something entirely different, or sit on its hands?
Ahead of the General Election next May, the UK Government is focussing on the `sunny uplands’ of economic growth, falling unemployment, and low inflation etc. But the Prime Minster needs to look over his shoulder and see some inky-black clouds rolling over the horizon behind him. The logical consequences of his `EU policy’ may blot out the sun all too soon.
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