EU trying to poach UK banks and businesses following invoking of Article 50

In the wake of Prime Minister Theresa May’s announcement last week that the UK was intending to invoke Article 50 on March 29, the bureaucrats in Brussels have responded with a number of demands intended to both isolate the island nation, and threaten their economic viability through their decision to move outside the coalition.

The submission of Article 50 is just the first step in what is expected to be up to two years of negotiation that will deal with a number of issues that include trade agreements, access to banking facilities, investment and capital, and of course how the EU will deal with the UK on a political scale since Brussels prefers to speak for all member nations as a whole rather than allowing individual members to make their own agreements with countries outside the Union.

Needless to say, the European Commission has not been accepting the reality that a member state would actually leave the Union very well, and has been publicly trying to extort, blackmail, coerce, and even threaten Britain into backtracking on the historic decision their people voted for last June.  And from here we have seen a number of different demands from a myriad of sources that seek to hamstring the UK, and limit any potential gains they might achieve from moving out from under the authority of the Brussels bureaucracy.

Jean-Claude Juncker and the Divorce Tax for leaving the EU

Jean-Claude Juncker is the leader of the European Commission, and is the epitome of a politician who never had a real job after getting his law degree back in 1979.  And it was in great part through his maneuvering while holding several different positions within the EU over the past 20 years that has led the once economic union to morph into a political one that quite often dominates the individual sovereignty of each of the coalition’s member states.

So it should probably come as no surprise that Juncker appears to have taken the UK’s Brexit vote as a personal affront against himself, and the agenda he has sought to create for the EU.  And in response on March 24 Juncker is demanding a ‘Divorce Tax’ of £50 billion for the right to leave the Union.

Britain must pay a divorce bill of ‘around’ £50billion to get a ‘friendly’ deal with theEU, Jean-Claude Juncker has warned.

The European Commission president insisted Theresa May would be made to ‘honour’ the UK’s commitments when Brexit negotiations get under way next week.

The tough line will increase tensions ahead of the Prime Minister formally triggering the Article 50 process on Wednesday.

The demand for a huge settlement to be agreed before talks on trade get going is shaping up to be a major roadblock.

Ministers have indicated they will not tolerate any sum above around £3billion, and Mrs May has said she is ready to walk away from the table if the EU does not offer reasonable terms.

Mr Juncker told the BBC that Brussels did not want to ‘punish’ the UK for leaving, describing Brexit as ‘a failure and a tragedy’. – The Daily Mail

Flight of the multi-national banks from London into the arms of the EU

It is quite obvious that Juncker and the EC do want to punish the Brits for daring to leave despite their rhetoric that they do not.  Yet perhaps even more important from this petulant outburst is the EC’s need to send a strong message to any other potential EU nation that the cost to leave the Union will inevitably be high.

But threats and demands from the bureaucracy are not the only stumbling blocks that the British government is quickly discovering in their pursuit to leave the Union.  And one of the biggest may be the flight of multi-national banks to the side of the EU, and away of their current and long-standing UK base of operations.

Hundreds of people working for Goldman Sachs in London will be moved to Europe as the company executes its Brexit contingency plans, Goldman’s Europe CEO Richard Gnodde told CNBC.

When asked whether the bank’s European expansion would reflect the moving of jobs out of London or the hiring of new personnel on the continent, Gnodde said it will be a “combination of things.”

“For this first period, this is really the period where we put in place these contingency plans, this in the hundreds of people,” said Gnodde, when asked to put numbers to anticipated headcount increases on the continent.

“We’ll hire people inside of Europe itself, and there will be some movement,” he said, explaining that the upcoming period will see investment in infrastructure, people, systems and technology. – Russia Today

Additionally, there is also the underlying threat from the European Central Bank that banks formerly residing within the UK who then choose to move their operations to Union based capitals may not get the same access to Europe as they did before unless they change their allegiance from Britain to the EU.  And in a statement made by the European Central Bank’s top supervisor on Friday, any bank that chooses to physically leave Britain to set up operations in another European city must accept and adhere to the rules and strictures of the ECB over that of their own sovereign government.

Banks moving from London to EU financial centers as Britain quits the bloc will not be given an easy ride by regulators, the European Central Bank’s top supervisor warned Wednesday. “We obviously don’t care whether UK banks move to Frankfurt, Dublin, Paris or some other location in the euro area. What we care about are safe and sound banks,” ECB board member Sabine Lautenschlaeger said in a Frankfurt speech. “Any bank that moves to the euro area will have to meet our standards,” – Russia Today

Lastly, the European Commission is also making demands on UK airlines who must change their home base of operations from a city within Britain to that of an EU member state or lose out on one or all European routes.

Brussels has warned that unless airlines like EasyJet and Ryanair move their headquarters from the UK or sell shares to European nationals, they will lose profitable European routes, reports the Guardian.

If airlines want to continue flying routes like Milan to Paris, they will be forced to have their headquarters based on the territory of the European Union and a majority of their capital shares must be EU-owned.

This ruling will also affect the Dublin-based Ryanair. At present, it complies with the rules by having 60 percent of shares owned by the European investors. However, after Britain triggers Article 50, the amount will be reduced to 40 percent, and may force the company to buy out some UK shareholders.

While British Airways doesn’t fly intra-Europe, its parent company IAG will be forced to sell off shares to comply with EU rules. – Russia Today

These demands appear to simply be the starting point for Article 50 negotiations, and why the process could easily stretch out over several years.  But it is also the reason why the UK needs to be willing to quickly join up with other economic based unions such as the Eurasian Economic Union, the Shanghai Cooperation Organization, or the ASEAN partnership to have a smoother transition for their trade exports and to find ways to fill many vacuums that will crop up once the process to leave the EU begins in earnest starting next week.


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