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06 September 2018

Brexit Weekly

Brexit, EMU, eurozone budget, EU budget, euro clearing, equivalence and more.

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  Articles from 19 July 2018 - 06 September 2018

  Brexit & UK
POLITICO: Angela Merkel: I can’t rule out Brexit talks breakdown
The German chancellor said that a ‘very intensive trade deal’ is the most likely outcome.  View Article
Andrew Duff: Britain’s best hope: A federal EU
Writing in POLITICO, Duff backs the idea of the EU proving an alternative route by creating a way to be part of the European Union that would allow the UK to stay while leaving, as a cross-country Spinelli Group proposes in its manifesto.  View Article
Financial Times: David Davis promises to vote against Theresa May’s Brexit proposal
Former Brexit secretary David Davis has promised to vote against Theresa May’s Brexit plan, raising the prospect that the prime minister could be defeated in parliament later this year.  View Article
POLITICO: Theresa May vows ‘no compromise’ on her Brexit plan
Theresa May pledged she would not be “pushed into accepting compromises” on the Brexit plan agreed by her Cabinet in July that are not in the U.K.’s national interest.  View Article
The Guardian: Michel Barnier says he strongly opposes May's Brexit trade proposals
Michel Barnier has said he is “strongly opposed” to the prime minister’s Chequers proposals on future trade, as he advised European car manufacturers that they will have to use fewer British-made parts after Brexit.  View Article
BBC: Raab and Barnier claim progress but no Irish breakthrough
Both sides in Brexit talks say progress is being made but without any breakthrough on the crucial issue of the Irish border.  View Article
The Guardian: People's Vote seeks to sway EU politicians with 'blind Brexit' poll
The People’s Vote campaign is seeking to turn French and German opinion against a “blind Brexit” under which the UK would leave the EU without certainty on the terms of a future trade deal.  View Article
Open Europe: The view from Brussels: How are the EU27 preparing for a ‘No Deal’ Brexit?
Open Europe's Pieter Cleppe outlines the arrangements planned by the EU27 to prepare for a possible 'No Deal' Brexit scenario.  View Article
The Guardian: No-deal Brexit is only alternative to Chequers plan, says Lidington
The Cabinet Office minister, David Lidington, has warned that relations between Britain and France are at “a fork in the road” – and the only alternative to the prime minister’s Chequers plan is a no-deal Brexit.  View Article
Financial Times: Corporate Japan despairs at UK’s lack of clarity over Brexit
Japanese companies are increasingly frustrated by the double talk from the British government over Brexit and are hamstrung on how to respond, according to the head of Japan’s most powerful business lobby.  View Article
The Federal Trust: Brexit: The Conservative centre cannot hold
Brendan Donnelly argues that outstanding divisions within the Conservative Party throw considerable doubt upon the capacity of Theresa May's government to conclude any Withdrawal Agreement with the EU before March 2019.  View Article
The Observer: No-deal Brexit will break up UK, warns Van Rompuy
Herman Van Rompuy, the former Belgian prime minister who was council president until 2014, told the Observer that he believed the threat of a no-deal Brexit was a new “operation fear” tactic being used by the government.   View Article
BBC: Customs workload will soar on no-deal Brexit warn experts
The boss of one of the UK's largest customs brokers is warning of a 500% rise in customs processing if there is no deal to leave the European Union.  View Article
BBC: Migration from EU to UK continues to fall, ONS figures show
EU net migration was 87,000 in the year to the end of March 2018, returning to a level last seen in 2012, according to Office for National Statistics data.  View Article
UK government's preparations for a 'no deal' scenario
The UK government published the first 25 of a series of technical notices that set out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations.  View Article
BBC: EU residents will be secure if no Brexit deal says Raab
The UK will "move swiftly" to safeguard the future of EU citizens in the event of no deal being agreed, Brexit Secretary Dominic Raab has said.  View Article
EPC: Brexit: Beyond the transition
Andrew Duff writes that, in Britain, mainstream politicians of all parties should ready themselves to accept the Barnier package deal. A second referendum would risk the UK crashing out of the EU without a deal, Duff warns.  View Article
Financial Times: UK faces rising chance of disorderly Brexit, Fitch warns
Credit rating agency Fitch has scaled back its expectations of the UK reaching an orderly transition deal with the EU on Brexit, warning that “an acrimonious and disruptive no-deal Brexit is a material and growing possibility”.   View Article
The Guardian: British expats in EU launch Brexit legal challenge
British expatriates have launched a fresh legal challenge against the 2016 referendum, arguing that the result has been invalidated by the Electoral Commission’s ruling on leave campaign spending.  View Article
Bloomberg: May weighs Brexit fix that keeps EU rules for longer
U.K. Prime Minister Theresa May is drawing up a plan to keep key European Union rules for longer after Brexit in order to break the deadlock in negotiations, a move that risks angering eurosceptics in her party.  View Article
The Observer: More than 100 seats that backed Brexit now want to remain in EU
More than 100 Westminster constituencies that voted to leave the EU have now switched their support to Remain, according to a stark new analysis seen by the Observer.  View Article
The Guardian: CBI urges government to drop 'blunt target' on immigration numbers
The Confederation of British Industry has urged Theresa May to drop her “blunt target” on immigration numbers and introduce new freedom of movement rules for EU citizens post-Brexit to ensure firms, large and small, can stay in business when the UK leaves the bloc.  View Article
Financial Times: TP ICAP names Paris as post-Brexit EU headquarters
TP ICAP, the world’s largest interdealer broker, named Paris as its new EU headquarters post-Brexit and reported a more than 50 per cent drop in half-year profits as it grappled with higher than expected costs related to the UK’s exit from the trading bloc, as well as its ICAP purchase.  View Article
Financial Times: Bank of America staff move raises concerns about London’s future
Bank of America is preparing to move research analysts from London to its EU hub in Paris, heightening concerns about London’s future as a financial services centre after Brexit.  View Article
Financial Times: Baillie Gifford picks Dublin to Brexit-proof its business
Baillie Gifford, one of the UK’s most successful asset managers, is to establish a Dublin offshoot to avoid being cut off from its growing number of European clients after the UK leaves the EU.  View Article
POLITICO: Mark Carney: Chances of no-deal Brexit ‘uncomfortably high’
The possibility that Britain could leave the European Union without a deal in March 2019 is “uncomfortably high,” according to Bank of England chief Mark Carney, who stressed the financial system was “ready” to withstand the potential shock.  View Article
The Guardian: Austerity and cuts like bedroom tax directly led to Brexit, academic research suggests
New research from the University of Warwick suggests that former Chancellor Osborne’s austerity policies directly led to Britain voting to leave the EU.  View Article
Financial Times: Credit Suisse chooses Frankfurt as a key post-Brexit hub
Credit Suisse has picked Frankfurt as a key post-Brexit centre for its investment banking and capital markets business and has already moved several hundred million dollars of assets to support the new hub.   View Article
Michel Barnier: An ambitious partnership with the UK after Brexit
Op-ed by Michel Barnier, the European Commission's Chief Negotiator for the negotiations with the United Kingdom.  View Article
POLITICO: City of London slashes Brexit job-loss estimate
The UK financial services sector could suffer as few as 5,000 job losses as a result of Brexit, according to a new estimate by the City of London Corporation — far lower than the industry had initially feared.  View Article
The Times: Brexit: EU judges are given the final say in key disputes
Britain has privately conceded that EU judges will be legal arbiter of disputes over payments to Brussels and the residency rights of more than three million European citizens living in the UK.  View Article
Financial Times: Deutsche Bank shifts half of euro clearing from London to Frankfurt
Deutsche Bank has moved almost half its euro clearing activities from London to Frankfurt, in the latest sign of European cities winning financial business from the UK ahead of Brexit.  View Article
Paul N. Goldschmidt: The Euro and the Dollar – The European Union and “Brexit”:
Whatever sympathy one might have towards the UK and the acknowledgment of its undeniable competencies in financial matters, a meeting between the EU 27 and Mrs May next September cannot lead to concessions on the absolute independence of the EU concerning financial matters, Goldschmidt warns.  View Article
Bloomberg: Ireland urges flexibility to avoid a ‘bad news’ no-deal Brexit
Irish Foreign Minister Simon Coveney called on the European Union to be open-minded in negotiating with the UK, warning that a no-deal Brexit would be “very bad news” for Britain as well as Ireland.  View Article
Bloomberg: UK weighs contentious Brexit plan for Irish border
British officials are considering allowing the EU to impose its market regulations on Northern Ireland, while the rest of the U.K. breaks away after Brexit, according to a person familiar with the matter.  View Article
Bloomberg: May says ending free movement after Brexit is ‘non-negotiable’
Prime Minister Theresa May said ending free movement of European Union nationals to the UK after Brexit is “non negotiable,” as she sought to reassure Britons that government preparations for a no-deal scenario are “sensible” and “responsible.”  View Article
Commercial Risk Europe: Chubb European Group secures Brexit plan and move to France
Chubb has converted two of its core businesses to Societas Europaea (SE) status, paving the way to redomicile Chubb European Group and ACE Europe Life from the UK to France at the beginning of next year and deal with Brexit.  View Article
Bruegel: Europe should avoid a no-deal Brexit
Authors argue that the UK's White Paper - which they consider a serious proposal for the country’s future relationship with the European Union - puts the ball in the EU court as it now has to say what kind of relationship it wants to establish with its neighbour.  View Article
The Independent: The referendum gave sovereignty to the British people, so now they deserve a final say on the Brexit deal
The Independent launched a campaign to win for the British people the right to a final say on Brexit.   View Article
Bloomberg: UBS flags $100 million in Brexit costs as it eyes Frankfurt hub
UBS Group AG, the Swiss bank that’s said to be leaning toward Frankfurt for its post-Brexit European Union headquarters, says it’s facing a bill of more than 100 million francs ($100.5 million) because of Britain’s departure from the bloc.  View Article
The Guardian: Brexit broke parliament. Now, only the people can fix it
With MPs divided we could be heading for a no-deal that only a minority want. A new prime minister or general election won’t solve this dilemma, writes Vernon Bogdanor.  View Article
General Affairs Council (Art. 50)
The Council, in EU27 format, was briefed by the EU's chief Brexit negotiator Michel Barnier on the state of play in the Brexit negotiations.  View Article
Regulations under the EU (Withdrawal) Act 2018 - Lords committee sets out criteria for “sifting” procedure
The House of Lords Secondary Legislation Scrutiny Committee (SLSC) has set out how it will approach its role as sifting committee for regulations introduced under the EU (Withdrawal) Act 2018.  View Article
The Economist: The case for a second Brexit referendum
If Parliament cannot agree on a Brexit plan, the decision must go back to the people, argues The Economist newspaper.  View Article
Bloomberg: UK would vote against Brexit in second referendum, study says
British voters are more skeptical about Brexit than they’ve ever been and would probably vote against leaving the European Union if the government called a second referendum, according to new research.  View Article
The Independent: Women support remaining in the EU by 12-point margin, poll finds
A total of 56% of women questioned by YouGov for the People’s Vote campaign supported remaining in the bloc in comparison to 44% who were happy for Britain to leave.   View Article
The Telegraph: Most voters in Tory marginals believe Chequers is 'bad for Britain' as critics say it is more hated than poll tax
The majority of voters in the Conservatives' most marginal constituencies believe Theresa May's Chequers plan is "bad for Britain", a new poll has found as critics warned it is now more hated than the poll tax.  View Article
The Independent: 2.6 million Leave voters have abandoned support for Brexit since referendum, major new study finds
In a key finding that will particularly intensify pressure on Jeremy Corbyn to take a tougher stance against Brexit, the study found the overwhelming majority of those changing minds are Labour voters in seats the party currently holds.  View Article
The Guardian: Four in five civil service specialists dissatisfied with handling of Brexit
Just one in 20 specialist civil servants is satisfied with the government’s approach to Brexit, a significant drop in approval from nearly one in five last year, according to a union survey.  View Article
The Independent: Public backing for Final Say referendum leaps amid division over May's Brexit plans
Public backing for a new referendum on Theresa May’s Brexit deal has leapt in the last month, amid deep division over her approach to EU withdrawal.  View Article
Reuters: UK voters should make final Brexit decision if talks with EU collapse - poll
If Brexit talks break down without a deal, half of Britons believe the final decision over whether to leave the European Union should be taken by the public in a referendum, according to a survey of more than 10,000 people.  View Article
The Independent: Voters in region critical to Tory election victory swing against Brexit, poll claims
The English region that could be crucial to a Conservative election victory and backed leaving the European Union in 2016 has swung against Brexit, according to a new poll.  View Article
Sky Data poll: 78% think the government is doing a bad job on Brexit
A survey reveals the government is haemorrhaging trust over Brexit, with two-thirds thinking the outcome will be bad for Britain.  View Article
YouGov: For the first time, more people support a second referendum
42% of Britons think there should be a referendum on the terms of the Brexit deal, 40% do not, a YouGov poll for The Times shows.  View Article
COVI: What do millennials want from Brexit?
The report reviews nine major studies looking at the perspectives of young people in relation to the EU and the Brexit process, compares these to the Chequers Plan recently outlined by the UK government, and examines the implications for the ongoing negotiations on the UK's relationship with the EU.  View Article
UK in a Changing Europe: No deal Brexit will be overwhelmingly negative for the UK, new academic report finds
A no deal Brexit will have a potentially large impact across a wide range of sectors and regions a new report by academic think tank The UK in a Changing Europe finds.  View Article
Bloomberg: Brexit has already cost UK more than 2% of GDP, UBS estimates
The Brexit vote has already cost Britain more than 2 percent of economic output, even before the nation formally exits the European Union, according to analysis by UBS Group AG.  View Article
Bloomberg: UK Tories propose Norway-style bridge to Canada-style Brexit
Nick Boles, a former minister who previously was loyal to May, said May’s plan was a ‘humiliation’ and suggested ending UK-EU talks, and joining European Economic Area.  View Article
The Guardian: Study estimates 500,000 EU workers are in low-skilled UK jobs
The report by the Migration Observatory at the University of Oxford said that employers could struggle to find workers after Brexit and the risk of labour exploitation might be heightened under the two main options available to companies to find staff once freedom of movement ends.  View Article
Bloomberg: WTO warns UK about global impact of no-deal Brexit
The head of the World Trade Organization said the UK risks trade disruption in the event of a no-deal Brexit because it is “very unlikely” to have agreed tariffs and quotas with the other WTO members in time.  View Article
The Guardian: Philip Hammond's £80bn no-deal warning exposes Tory rift
Tory divisions over Brexit were exposed afresh on Thursday, as Philip Hammond warned that leaving the EU without a deal would blow an £80bn hole in the public finances, just hours after Dominic Raab sought to play down the risks.  View Article
ACCA: Brexit, no deal - the VAT guidance
ACCA welcomed the VAT guidance issued by the UK government in case no deal is reached in the Brexit negotiations. The VAT guidance explains that if a no deal happens, the remaining EU member states will become third countries.   View Article
Financial Times: Liam Fox plans to increase UK export target after Brexit
Liam Fox, the international trade secretary, has launched a plan to increase Britain’s exports from 30% to 35% of gross domestic product but did not specify a timeframe or to commit new funds.  View Article
The Guardian: Companies in Brexit 'supply shock' as fewer EU citizens come to UK
Companies are suffering from a “supply shock” as fewer EU citizens come to the UK, and companies struggle to fill vacancies, according to a survey of 2,000 employers.  View Article
IMF: The long-term impact of Brexit on the European Union
When the UK leaves the EU, higher barriers to trade, capital flows, and labor mobility will affect output and jobs not only in the UK but also in the remaining 27 EU member states. There will be costs on both sides, as a new IMF study suggests.  View Article
Centre for Cities: Brexit cities stand most to lose if a bad services deal is reached
New data published today suggests financial hubs outside of London could stand to lose most if the UK’s financial services sector is negatively impacted by Brexit.  View Article
The Irish Times: UK and EU formally start splitting WTO membership agreements
The UK and the European Union formally filed for divorce at the World Trade Organization on Tuesday, following many months of diplomatic preparations to smooth the way for the historic move.  View Article
Dominic Raab: Britain will refuse to pay £39 billion divorce bill to Brussels if the EU fails to agree trade deal
Dominic Raab told The Sunday Telegraph that he would make the vast payment formally conditional on the EU “fulfilling its side of the bargain”.  View Article
Bloomberg: Germany dismisses key UK demands on banks’ post-Brexit access
The European Union won’t rush to enhance market access for financial firms outside the bloc, a senior German official said, pushing back against key UK government demands in the Brexit negotiations.  View Article
Financial Times: Deutsche Börse cools post-Brexit euro clearing ambitions
Deutsche Börse chief executive Theo Weimer has toned down his previously bullish ambition to quickly win a large chunk of the clearing market for euro-denominated derivatives.  View Article
Financial Times: Brexit worries fuel outflow from European equity funds
European equities extended their third-longest streak of net redemptions in the latest week, driven by outflows from UK equity funds on concerns about Brexit.  View Article
Bloomberg: UK call for Brexit contract fix wins German support
European Union and U.K. authorities must agree on a political solution to the threat Brexit poses to trillions of dollars in derivatives and insurance contracts, according to Germany’s top financial regulator.  View Article
AFME comments on UK Government financial services no-deal paper
Mr Lewis said that the consequences of a no-deal Brexit scenario could mean prolonged disruption to the smooth functioning of Europe’s capital markets, which would affect investors, borrowers and savers across Europe and beyond.  View Article
Financial Times: EU vows to get tough on UK’s market access after Brexit
The EU’s financial services chief has warned that Brussels will be strict in policing the Britain’s rights of access to the bloc’s market after Brexit.  View Article
Commercial Risk Europe: UK’s proposed Brexit solution for financial services won’t work for brokers, warns LIIBA
The London and International Insurance Brokers’ Association (LIIBA) is concerned that proposals put forward by the UK Government this week for “enhanced equivalence” between financial services post-Brexit will not work for intermediaries and has written to Prime Minister Theresa May to suggest a way forward.  View Article
UK Treasury: Draft Capital Requirements (Amendment) (EU Exit) Regulations 2018
Draft statutory instrument, which will make amendments to retained EU law, and existing UK law, related to capital requirements, to be laid under the European Union (Withdrawal) Act 2018.  View Article
Financial Times: Risk of a no-deal Brexit matters for European bank bonds
The rising threat of a no-deal Brexit is causing consternation for investors who are worried that more than €100bn of European bank debt issued under English law could no longer comply with the EU regulation.  View Article
EurActiv: UK warns of damage to EU without special deal on financial services
The UK has repeated its demands for a post-Brexit agreement on financial services to go way beyond the EU’s current standard with third countries in a new government paper, warning that a ‘hard Brexit’ will damage the EU.  View Article
Financial Times: Asset managers draw up plans for hard EU exit
Nearly two-thirds of asset managers are preparing for a “hard” Brexit scenario of the UK leaving the EU single market and customs union, as the negotiations between Brussels and London head into a critical phase.  View Article
Commercial Risk Europe: BIBA warns of potential contract continuity problems post-Brexit
The British Insurance Brokers’ Association (BIBA) has said there is “concern” that some policies running with a renewal date beyond Article 50’s 29 March 2019 negotiating period may not be valid if no Brexit agreement is reached, with no silver bullet solution.  View Article
Financial Times: Finance watchdog relaxed about bank models after Brexit
The UK’s financial watchdog has told banks it is sanguine about what model they use as they move business to the EU after Brexit, a stance in contrast to the approach from European regulators.  View Article
AFME: Contractual continuity in OTC derivatives challenges with transfers
AFME and ISDA have published a joint paper examining the challenges faced by UK and EU firms and their clients seeking to transfer their legacy cross-border over-the-counter derivative contracts to an appropriately licensed EU-27 affiliate in advance of Brexit.  View Article
LSE: Brexit’s epicentre: London’s financial services sector and its place in the UK economy
Developments in London’s financial district help us understand the precise form that Brexit will take, argues Sarah Hall. Hall writes that the government’s decision making is still not reflecting the City’s strategic importance.  View Article
Insurance Europe: Free flow of personal data must be guaranteed post-Brexit
Insurance Europe has written a joint letter to the European Commission calling for legal certainty about the transfer of personal data between the UK, the EU and the European Economic Area (EEA) ahead of Brexit to avoid business disruption and adverse effects for European consumers.  View Article
Centre for Cities: London links: the geography of financial services in the capital and beyond
The research shows that, for communities across the UK, the sector is a key driver of jobs, productivity and share of exports. The analysis highlights that regulatory and trade deal changes affecting the sector will have a significant impact in towns and cities across the whole country.  View Article
Commercial Risk Europe: IUA publishes new Brexit contract continuity clause for subscription market
The International Underwriting Association (IUA) has published a second policy clause to help London market insurers deliver clients contract continuity for policies written on a subscription basis if a no-deal Brexit hits.  View Article
Bloomberg: Be ready for any Brexit market hit, UK regulator tells City
Sam Woods, the central bank’s top supervisor, said contingency planning for Britain’s withdrawal from the European Union will be similar to its preparations for the Scottish independence referendum in 2014 and the UK’s Brexit vote two years later, which sent the pound plunging against the dollar.  View Article
Bloomberg: UK presses ahead with no-deal Brexit plans for European financial firms
The government released a draft proposal that would give firms from the European Economic Area -- the EU plus Iceland, Liechtenstein and Norway -- as well as non-UK central counterparties the temporary recognition they’d require to continue operations.  View Article
Financial Times: Brussels rejects UK’s financial services Brexit plan
Brussels has rejected the UK’s proposals on how to govern the City of London’s access to the European market after Brexit, saying Theresa May’s latest financial services plan would rob the EU of its “decision making autonomy”.  View Article
The FCA’s approach to Brexit: our preparations and our vision for the future
Speech delivered by Nausicaa Delfas, Executive Director of International at the FCA, where she offers reflections on the FCA’s preparations for the UK’s withdrawal from the EU.  View Article

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