Sir Gerry Grimstone, Chairman of TheCityUK addressed TheCityUK Annual Conference on Tuesday 30 June 2015
I am very pleased to be able to use the opportunity of today’s Conference to launch TheCityUK’s new report, EU Reform – detailed proposals for a more competitive EU.
This report builds on our previous publications on this topic which have included detailed legal and economic analyses.
We have heard today that a Single Market for capital is central to the ability of our industry and the customers we serve if we are to remain competitive in the global economy and to deliver the jobs and growth which Europe needs. The City is Europe’s Financial Capital and our full participation will be critical to the success or otherwise of Capital Markets Union. And in order to be able to shape and steer the CMU debate to deliver its full potential, the UK needs to play a central role …… it is impossible to do this effectively if we are outside the EU.
Ultimately, a major part of achieving a more competitive EU centres on completion of the Single Market and this is the primary focus of our EU Reform report. Completion of the Single Market brings benefits to the providers of financial services across the EU because of the benefits it will bring to thousands of companies and to millions of consumers. It would allow businesses and people to access the best and most competitive financial products to meet their individual needs, whether through long-term savings and investment or through products to protect them through the good times and the bad.
The UK on its own account cannot support a financial centre as large as the City. We need Europe as much Europe needs us. We are inextricably linked – but reform is essential if we are all to continue to compete on the global stage.
The UK is not alone in calling for reform: other Member States also recognise the need for change.
Why is this? Quite simply, the Single Market is the world’s biggest internal market with 500 million consumers generating a quarter of global GDP. It is also key to the EU’s global competitiveness. Completing the Single Market in Capital, Digital and Financial Services will generate much needed economic growth and could be worth an additional 5% to EU GDP in the short-term and as much as 8% over the longer-term. This is equivalent to between £500 billion and £800 billion of which the UK’s share would be in the region of £110 billion.
The EU accounts for around 45% of UK exports of goods and services and around 50% of imports of goods and services. Over 80% of UK firms that trade do business in Europe. Together, the European Union’s 28 members account for 16% of world imports and exports.
At present, this Market is realising nothing like its full potential. Our reforms are intended to change this.
The report that we are publishing today sets out 25 detailed recommendations for reform which are both achievable and cumulative. Taken together, they will enable Europe to do less in a more efficient way and create a deep and strong Single Market, open to the world.
In presenting this report, we were keen to focus on three core objectives:
- To develop EU reform policies that will help all EU governments to re-orientate the EU towards a jobs and growth agenda;
- To assist the UK Government in formulating a viable and feasible approach to improving the terms of the UK’s relationship with the EU; and
- To influence the EU reform debate in the UK and other Members States so that the UK can continue to serve the EU as its financial capital.
The 25 reform proposals put forward in the report are focussed on four areas:
- A deep and strong Single Market, open to the world;
- Better regulation;
- A European agenda for jobs, growth and competitiveness;
- Fair and equal treatment of all Member States.
- Let me give some examples.
We want a deep and strong Single Market open to the world, with a Single Capital market, a Single Market in Financial Services and a Single Digital Market.
To ensure better regulation we propose that impact assessments for all EU institutions should be conducted by an independent Regulatory Scrutiny Body.
To catalyse more jobs, growth and competitiveness, our focus is on a third country regime that ensures the EU remains open for business from outside the EU. More resources must be allocated to negotiating vital trade deals.
To enshrine fair and equal treatment of all Member States we have prioritised protecting the integrity of the Single Market and ensuring better transposition and enforcement of European legislation.
Our reforms sit squarely with the grain of progressive thinking and can be secured without the need for Treaty change.
It is imperative that, in reforming the EU, the primary objective should be to promote economic growth and secure Europe’s competitive position in the global economy. In order to do this we have sought to highlight and focus on ‘quick wins’ that have the potential to bring tangible, immediate benefits to Europe’s people.
In the longer term, I have no doubt that constitutional reform is desirable both in the interest of the Eurozone and of the Single Market providing a strong legal basis for the two to coexist in harmony, but that is for another round, another day.
The proposals put forward in this report are not about ‘more Europe, or ‘less Europe’ but a ‘better, more thoughtful Europe’ that will benefit all 28 Member States. This ambition aligns closely with Vice President Timmermans’ aims for Europe to be big on big things and small on small things. I can think of no better sentiment.
Our report is not a British report nor a British set of proposals. It is a report that has drawn together ideas from practitioners in many different countries. I want our members to take this report to every European capital and to stress the benefits that these reforms will bring.
I will leave you with one final message. Let’s get on with it!
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