After a little more than half of the British population voted to leave the EU, the guessing game as to how it is going to affect the UK has been rife.
The first look at Brexit was disheartening to say the very least. The stock markets took a hit and consumers have second-guessed the British companies they were depending on. After this, on the plus side, it was only looking up as companies started to regain trust but nevertheless doubts still remain. The financial sector is the most affected by Brexit and also the most important for the British economy since it accounts for two million jobs.
Passporting and what we are going to do without it?
A lot of companies have set up their headquarters in London. They depend on Passporting to maintain relationships with any ties they have in the EU. Passporting essentially means that any financial institution based in the United Kingdom can sell their product or service in the EU without licensing it. This saves the companies a lot of time and a lot of money. This is also why we are seeing companies move their headquarters to Germany and other countries that are essentially in the centre of all the action.
The solutions to this problem are equally hard to pursue. Therefore it overall seems unlikely that companies will stand where they did. The idea that companies will simply follow in the footsteps of Switzerland and that there will be a Swiss Deal Part 2 is highly unlikely. This is due to the fact that countries leaving the EU are not going to be given the friendliest treatment. Even if it were to happen, the functions that Passporting allows are not covered.
Losing our brain and brawn
A lot of Britain’s talent comes from the EU and harder visas. Getting into the country not being a cake walk anymore means EU nationals would prefer working elsewhere in Europe. Certainly in places where they do not feel like strangers to the land. This could mean that the benefits London had as one of the financial capitals of the world are gone. 12% of the workforce, including many in the financial sector, comes from the EU.
Workers in London have not seen any changes yet and life has continued as it did before the vote. However, now with uncertainties at every turn consumers and companies are second guessing everything.
James Holloway is a journalist covering European politics, economic developments, and cross-border relations. His work focuses on policy changes, trade agreements, and key events shaping Europe’s future.
