Europe’s Capital Markets Union is Lost Without Britain’s Constraining, Liberal Influence

London is vital to the establishment of a fully functioning capital markets union in Europe

by Jeremy Warner

Dublin and Frankfurt are reportedly licking their lips in anticipation. Yet perhaps oddly, Luxembourg is dreading it. A lot of what makes the European Union such a dysfunctional organsation is its very make-up of squabbling sovereign voices and divided national interests. This particular quarrel is about finance, so what’s the issue this time?

On some measures, Luxembourg is Europe’s second largest financial centre after the City of London. One would therefore expect it to be treating Britain’s possible exit from the European Union as a cause for celebration. But it is not.

If the UK Treasury is to be believed, the City will decamp en masse to alternative centres in Europe should UK citizens decide to quit the EU. And if this is even only partially true, Luxembourg, like Dublin and Frankfurt, ought to be a prime beneficiary. Even Warsaw expects to benefit from the assumed exodus to some degree.

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