Luxembourg’s Finance Minister urged the European Union this week to “be creative” and “look at thinking in new categories” when it comes to examining a final deal with the UK.
Pierre Gramegna, a former diplomat turned politician sent a warning to the EU saying “maybe we are stuck too much in precedent.”
But what is clearly becoming a issue is that other countries, with much more suitable regulatory conditions, are attempting to woo companies out of Europe. Gramegna pointed to New York, Singapore and Hong Kong as possible options for companies who may move out of the UK. Whilst Paris and Frankfurt have been engaged in fighting between each other to become the new European hub, businesses, sick of the uncertainty that comes with political in-fighting, are looking elsewhere.
“Some of the financial centres outside the EU are very actively courting institutions and devising schemes to attract [firms]…”a number of firms I speak to have an option B ready that involves repatriating EU activities to their headquarters.”
France and Germany have both been accused recently of stalling Brexit negotiations or of manipulating the circumstances to punish Britain and push businesses out of London. But this has descended into a petty, pre-war competition to determine who is the dominant figure in European geopolitics. The issue with these Darwinian games is that neither side may be left standing by the end.
Businesses get sick of political games, all they ask for is certainty. New York, Hong Kong and Singapore are offering what the EU and the UK cannot. Unfortunately for the EU, neither Frankfurt or Paris will be able to offer certainty when the UK leaves the EU. Gramegna is completely right, the only way to guarantee businesses remaining in the European area is for the EU to be “creative” and not stick to “precedent.”
Brexit is an unprecedented event and it can therefore not be treated lightly. Unless the EU is willing to be less obstinate, they risk their own survival.