In an interview with the Guardian, Bundesbank boss, Jens Weidmann, warms that passporting rights to operate across EU will be lost if UK does not at least stay within the European Economic Area, a critical blow to London’s financial services industry.
It looks like there will be a new battle between ‘Hard Brexit’ Vs. ‘Soft Brexit’, just a tough as the original referendum context.
Right-wing conservatives are starting to put pressure on the government in favor of a ‘Hard Brexit’.
Critically, it looks like a hard Brexit will be necessary to guarantee controls on immigration from the EU. BUT with a hard Brexit, the UK will be denied all the benefits of privileged market access to the EU.
Personally, I think that Weidmann’s warning is timely and appropriate.
We can expect the massive financial services industry lobby to start pressing the government for a soft Brexit. Very quickly we are likely to see major divisions in the Conservative Party once again. The critical factor is that Theresa May needs to protect her slim majority.
If I worked in the the Financial Services sector in London and had a big mortgage, I would be very getting worried about the downside risks following a hard Brexit. Top quality German courses in London should will see a boom. It reminds me of a British colleague from the automotive industry, he now lives in Southern Germany.