It’s always interesting to get away from the UK debates engaging TheCityUK, and to go to another EU member-state for an alternative view. TradeWonk’s annual visit to Ireland was a welcome opportunity to do so and to be exposed to Irish viewpoints for much of August.
Of course, in any country, much news and comment is very local. TradeWonk had plenty to absorb in terms of stories such as the “Sligo Champion” front page “Arson Attack on Water Meters” or the “Irish Times” piece “State accused of squandering lucrative Seaweed Sector”, not to mention ubiquitous daily updates on the “Rose of Tralee” contestants. But what was really striking was the continuing media focus, over what might have been dismissed as a silly season holiday month, on Ireland’s place in Europe, measured against various yardsticks, current and historic. Some of this sprang from this year’s August being a time for sombre European reflection, as the centenary of the start of the First World War, with plentiful comment inspired by President Higgins’s words on Ireland’s role in the conflict and long-standing Irish sympathies with small neutral nations such as Belgium, now sharing in EU membership. In turn, this seems to have led to thoughts on how Irish leaders a century ago might have viewed Ireland’s present-day situation, from high level analyses of the politics of the Easter Rising and the Free State down to very specific suggestions – among them broadcaster George Hook’s contention at the annual Michael Collins Commemoration at Béal na Bláth in County Cork that “A Collins regime would have left the bankers and the regulators of the 21st century in no doubt that their careers and liberty, if not their lives, were forfeit if they failed to live up to his standards – light-touch regulation does not seem like something he would have espoused”.
But the main spurs to sober though – or so it seemed to TradeWonk – were the implications for Ireland if Scotland left the UK or if the UK left the EU. Either possibility has resonances for Ireland that are not shared by any other EU member, given that British and Irish politics are so closely intertwined. Former Irish Premier Albert Reynolds’s death in mid-August brought forth comment on the importance of close Irish-British relations, as exemplified in how the relationship between Mr Reynolds and John Major helped bring about the IRA ceasefire. Not to mention read-across from Irish Home Rule and independence to the Scottish referendum debate now. Some of the issues arising over Scottish independence – the position of Sterling is one – have direct parallels with those faced in the 1920s after the creation of the Free State. There is also the position of Northern Ireland, with its traditional links with Scotland. It’s probably no accident that TradeWonk used regularly to see Alex Salmond at the Humbert Summer School in County Mayo – an annual event named after General Jean-Joseph Humbert (leader of the French invasion of Ireland in 1798) and devoted to discussing questions centred on Ireland in Europe. So there is intense Irish interest as the Scottish referendum approaches.
Whatever the issues arising from Scottish independence, those surrounding any question of the UK leaving the EU are just as weighty – or more - for Ireland. For one thing, Brexit would remove the UK from the EU customs union and so could mean the re-creation of a customs border within the island of Ireland. After the US, the UK is Ireland’s next-biggest export partner, taking 16% of Irish exports; and the prospect of tariffs between the two countries for the first time in 40 years is challenging. There are UK and Irish financial services providers operating in both parts of Ireland. And there is the common travel area between Ireland and Britain. So Ireland has multiple reasons for following closely how the UK debate on the EU develops. Nor is this new. When the Treaty of Lisbon was rejected in the Irish referendum held in June 2008, an immediate question arose: did Ireland (a beneficiary of the EU, on the EU’s Western rim) really intend to paint itself as aligned with British Euro-sceptics and to risk being viewed in Brussels as a semi-detached EU member? Perhaps unsurprisingly, the second referendum, in October 2009, approved the Treaty by a two-thirds majority.
So there is plenty of cogent background to the current Irish interest in Britain’s EU future. At a high level, with Ireland’s slow recovery and concerns about stasis in the Eurozone, there is appreciation of the EU’s need for reform, but also apprehension over any new uncertainty within the EU. And there is also concern as to how UK renegotiation will play out, with observers such as Dennis Kennedy warning that “Cameron and UK may pay high price for tightrope act on the EU”. Others however perceive Brexit opportunities - “US banks plan move to Ireland if UK quits EU” – and even suggest that the opportunities are already materialising, with the news, for instance, that Udemy, the world’s largest destination for online courses, is to establish its European headquarters in Dublin, adding to the digital businesses operating out of Dublin and its Digital Hub. And there is also impetus for Ireland to maximise its EU benefits, in big ways and small, such as the TTIP-related American-Irish Business Forum in the run-up to the Croke Park Classic.
A short stay in another country is not enough to gauge opinion. But it was instructive, all the same, to get an Irish angle on issues that cross TheCityUK’s desks all the time – and an angle that is a salutary reminder that, however much some issues may be seen as UK-specific in the UK domestic debate, they resonate differently, but equally forcefully, for an EU neighbour country.
This week we were in Belfast, kindly hosted by Citi, for a seminar to discuss the role of financial and related professional services in Northern Ireland.
A TheCityUK delegation, led by Mark Garvin of JP Morgan, visited Rome for a day of meetings on 23 July to prepare for the establishment of an Anglo-Italian financial services dialogue during the Italian Presidency of the EU.
Earlier this year I was invited by the British Chamber of Commerce of Morocco to give a speech on ‘Developments in Islamic Finance in the UK’ at a conference on “Islamic Finance in Morocco”. The conference happily coincided with the visit last week of the Rt Hon Lord Mayor of the City of London, Alderman Fiona Woolf, so I was able to join her delegation for a very full and productive programme in Casablanca and Rabat. As well as a 20 strong business delegation, the Lord Mayor was supported by the Prime Minister’s Trade Envoy to Morocco, Lord Sharman.
Given that today sees the most important European Elections ever, there could be not better time to talk about the UK’s place in the EU. Let me encourage you all to vote – as your conscience determines – but do make time.
As the leading cross-sectoral body for our industry, TheCityUK has been setting out the view of our sector on the EU-UK relationship. It is our role at TheCityUK to make sure that the practitioner voice on the EU debate is heard loudly and clearly, in the UK, the EU and in the international arena.
We are at a moment of transition between the old and new European Parliamentary and Commission mandates. The current mandate has focused on reform and stability following the financial crisis but in the next 5 years, the task will be to create an ‘agenda for competitiveness’ that enables the EU to deliver the jobs and growth we need. It is important that financial and related professional services engage in a dialogue with policymakers about our industry’s role in delivering solutions to the challenges facing Europe that directly meet that competitiveness challenge.
Last night I shared a platform with the Foreign Secretary at the FCO Leadership Conference reception. In my speech I set out why what the FCO does is so valuable and why it makes a difference to the UK’s business interests.
On Monday we launched our most significant round of EU research yet, to a 200 strong audience at Clifford Chance. Speakers were of the very highest calibre across the industry and Government. Sir Win Bischoff opened proceedings by saying that the EU debate is the most important one our country faces at the moment. He revealed that all alternatives to EU membership considered in the reports being launched would be costly for business and finance, risking damage to the UK through uncertainty, reduced market access and loss of influence.
Legislators reached a deal on the Single Resolution Mechanism (SRM), the second phase of the Banking Union, after sixteen hours of negotiation that began on the afternoon of Wednesday 19 March and ended with German Finance Minister Wolfgang Schauble being roused shortly before dawn to give his blessing to the agreement. Subject to final approval, the text will now be put to a plenary vote on 15 April.