British prime minister, David Cameron, has promised an ‘in/out’ referendum on the UK’s continued membership of the European Union (EU) before the end of 2017. The vote to either leave the EU or stay is dependent on his Conservative party winning the next general election, due to be held in just over two years’ time.
The implications of a possible UK exit from the EU are profound for the financial services technology sector, with London’s position as the premier trading hub in Europe and the establishment of large technology companies in the country potentially threatened by an exit. The Financial Transaction Tax (FTT) imposed by Europe, which the UK is fighting against, is just one example of the growing rift opening up between the UK and the continent.
In his much-anticipated speech, postponed because of the hostage drama in Algeria, David Cameron said that the Conservative party manifesto for the 2015 general election will ask for a mandate to negotiate a “new settlement” for Britain in Europe, which will be put to voters in a referendum within the first half of the five-year Parliament.
Cameron also, however, pledged that he would campaign “with all my heart and soul” for the UK to remain an EU member when the referendum takes place and added that a decision by the electorate to withdraw would be “a one-way ticket, not a return”. The consequences of any possible EU exit for businesses in terms of tax and regulatory laws, the jurisdiction of EU-wide laws, and more generally in terms of jobs, investment and economic prospects for the UK, are widespread.
The prime minister acknowledged that public support in the UK for the EU was “thin” and concern over the lack of democratic accountability is “particularly acute”. However, a vote now between the European status quo and departure would be “an entirely false choice”, as the EU is set to be “transformed perhaps beyond recognition” over the next few years by measures needed to save the euro single currency.
Reaction to Possible UK Exit from EU
Commenting on the PM's speech French foreign minister, Laurent Fabius, said: It could be dangerous for the UK itself because the UK outside Europe? Difficult. The other day I was at a meeting with lots of British people, in particular businessmen, and I told them cleverly that if the UK decides to leave Europe we will roll out the red carpet.
“We want the British to be able to bring all their positive characteristics to Europe... but you can't do Europe a la carte. I'll take an example which our British friends will understand. Let's imagine Europe is a football club and you join, but once you're in it you can't say, 'Let's play rugby'.”
Pierre Moscovici, the French finance minister, was less critical and said that the UK had always been a “particular” but “extremely useful” EU member. “The European spirit is also to respect diversity. I support one Europe and one Europe that is differentiated, one Europe where some can advance more quickly than others,” he added.
Other critics suggested that Cameron was proposing a “28-speed Europe” and that the UK was attempting to impose its own rules on the rest of the EU.