Manchester University Press
2 Subtraction by subtraction?
Abstract
How is Brexit likely to affect efforts to complete the European Single Market for capital and financial services? Brexit will shrink European capital markets by roughly 25 per cent, with even larger declines in equity markets and pension funds, and losing the UK will undoubtedly complicate EU financial reform efforts. This chapter assesses the technical rationale behind two key European financial reforms – banking union and European Capital Markets Union, before identifying the priorities of three key players in shaping these reforms: the European Commission, United Kingdom, and Germany. Looking at these priorities through the lens of Dirk Schoenmaker’s financial trilemma, Brexit seems likely to mean that European financial markets will evolve more in line with German preferences. In practice, this means that banks will continue to play a leading role in European finance, with protective niches carved out for nationally sensitive financial actors, and concern over moral hazard stemming from mutualized liabilities will likely outweigh arguments calling for greater European solidarity.
Abstract
How is Brexit likely to affect efforts to complete the European Single Market for capital and financial services? Brexit will shrink European capital markets by roughly 25 per cent, with even larger declines in equity markets and pension funds, and losing the UK will undoubtedly complicate EU financial reform efforts. This chapter assesses the technical rationale behind two key European financial reforms – banking union and European Capital Markets Union, before identifying the priorities of three key players in shaping these reforms: the European Commission, United Kingdom, and Germany. Looking at these priorities through the lens of Dirk Schoenmaker’s financial trilemma, Brexit seems likely to mean that European financial markets will evolve more in line with German preferences. In practice, this means that banks will continue to play a leading role in European finance, with protective niches carved out for nationally sensitive financial actors, and concern over moral hazard stemming from mutualized liabilities will likely outweigh arguments calling for greater European solidarity.
Chapters in this book
- Front matter i
- Contents v
- List of figures and tables vii
- List of contributors viii
- Introduction 1
- 1 A cautionary tale 18
- 2 Subtraction by subtraction? 38
- 3 Brexit and the Single Market 57
- 4 Social Europe after Brexit 80
- 5 European citizenship and free movement after Brexit 95
- 6 The EU legal order without the UK 113
- 7 The East–West divide 128
- 8 Networks after Brexit 146
- 9 European Union trade policy in the wake of the Brexit vote 162
- 10 A stronger European Union? 177
- Conclusion – the EU after Brexit 194
- Index 213
Chapters in this book
- Front matter i
- Contents v
- List of figures and tables vii
- List of contributors viii
- Introduction 1
- 1 A cautionary tale 18
- 2 Subtraction by subtraction? 38
- 3 Brexit and the Single Market 57
- 4 Social Europe after Brexit 80
- 5 European citizenship and free movement after Brexit 95
- 6 The EU legal order without the UK 113
- 7 The East–West divide 128
- 8 Networks after Brexit 146
- 9 European Union trade policy in the wake of the Brexit vote 162
- 10 A stronger European Union? 177
- Conclusion – the EU after Brexit 194
- Index 213
