Realist, not conformist analysis of the latest financial, business and political news

It Was Always Trivially Obvious That The Brexit Financial Services Deal Would Be Done

Glory Be, we are saved, Britain’s financial services industry won’t be cut off from the European markets. All of which is akin to that wondrous – possibly apocryphal – headline of yore, “Fog In Channel, Europe Cut Off.” For it never was true that there was going to be a problem with us not being able to sell them stuff. Any problem was going to revolve around them not being able to buy stuff from us. It is, after all, the consumer who benefits by being able to consume what is bought, the importer who benefits from being able to import. This must be so otherwise why would anyone bother to go to work in order to be able to buy things to consume or import? The value of the consumption, the import, must be higher than the cost of the work done to gain it after all.

So this, it’s obvious that this would happen:

Brexit deal on financial services agreed – report
Tentative agreement reached that would give UK companies access to European markets, Times reports

Obviously this was going to happen and we can see the obviousness if we recast the statement there. It should read that an agreement has been reached to give European companies access to the fine financial services offered by British companies.

The Times newspaper said London had agreed in talks with Brussels to give UK financial services firms continued access to the bloc. The pound has risen 1% against the dollar in response

Again, it’s not the sellers who benefit here. It’s the buyers. Sure, we get some nice well paid jobs in London. They get financial services. Which do they think is more valuable? That they’re paying us for the financial services does indeed mean they think the services are more valuable, doesn’t it?

Theresa May seals Brexit deal on financial services

Given this background even Darling Theresa couldn’t screw this one up. As Mervyn King has been known to point out London is the wholesale financial centre for Europe. British firms not being able to trade on the continent is interesting, European firms not having access to wholesale financial services is a disaster. For them.

Of course there was always going to be a financial services deal concerning Brexit. The very fact they buy the things from us shows they value them and why would they deny themselves the very things they value? Even federasts aren’t that stupid.

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5 years ago

Well, considering that May has screwed up the entire Brexit negotiations, and that the EU are stupid enough to believe that it’s London’s gain for the EU to use its financial markets, the question is what have we given for this access? I doubt it was cheap.

5 years ago

I do not agree that it was trivially obvious that a deal would be done since Juncker appointed Barnier as his lead negotiator and Macron was trying to set up Paris as the replacement for London as the financial centre of Europe [yeah, I know Frankfurt was more plausible]; “chauvinism” was created as a word to reflect a French attitude and just because other 26 EU countries would/will be worse off if Barnier blocks a deal, it is naive to supose that he will not.

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