“Before the end of this year, I do not rule out further adjustment of the operation of financial institutions and relocation of jobs,” said EY analyst Omar Ali. There have been about 400 transfers in the last month alone. According to him, banks, insurance companies and asset managers are trying to ensure that they can continue to serve their EU clients after the end of the transitional period, ie after 31 December this year.
“The transfer of some jobs to the European single market, especially in the area of financial services, is a logical decision and the total number is very likely to increase by the end of the year. The risk of hard Brexit adds to this, “says Raiffeisenbank’s chief economist Helena Horská.
The new popular destinations for the capital, which has moved from the British financial center City, are mainly Dublin, Luxembourg, Paris and Frankfurt am Main. In addition, relocations are taking place outside the banking sector.
Last week, the London-based consulting firm Blick Rothenberg advised British exporters to set up a branch in the European Union as soon as possible. In the absence of a free trade agreement, such a move could make it cheaper and easier to make payments and deliver goods to European partners. Cars, telecommunications technology, tobacco, medicines and food are the most exported from the UK to the EU. The mentioned financial services are also important.
Another option for businesses is to pay for a distributor to act as an intermediary. According to BBC however, representatives of various industries already claim that there will be very few such distributors and will have them “royally paid” for their services.
However, European and therefore also Czech suppliers operating in Britain do not have to take the same step yet. “It is impossible to give advice. This is case by case. Each company must judge for itself what is advantageous for it and what is not. It will very much depend on the final form of the Brexit agreement, “says Horská.
“It simply came to our notice then. Negotiations are not yet closed. I understand that the uncertainty is astringent, but I think that in the end the economic motivation outweighs the political one, “says Lukáš Kovanda, the chief economist of Trinity Bank.
Another complication can be access to bank accounts. At the end of September, some British banks, such as Barclays and Lloyds, announced that they would close accounts to British citizens living in the Union after the New Year.
They will lose the possibility of so-called passporting, which allowed them to operate throughout the EU, and will have to apply for a license in each individual country. “On the contrary, European banks should continue to maintain free access to the British market, unless the rules have changed yet,” Horská points out.
Experts addressed by the E15 daily did not agree on the impact of the outflow of money, business and employees from the United Kingdom to Europe on the overall performance of the European economy.
“The relocation of people and assets will have no clear impact. I assume that in the interest of the stability of the financial sector and services, regulators will be tolerant of shortcomings in meeting their requirements in the first months, ”says Michal Skořepa, a macroeconomic analyst at Česká spořitelna.
According to Horská z Raiffeisenbanka, the European Union will benefit from the trend and bring Britain heavy and irreparable losses. “That’s why Britain’s highest monetary authority is forecasting a deep economic downturn and a slow recovery for the British economy,” the economist said.
Kovanda from Trinity Bank has a different opinion. In his opinion, the City of London will continue to be an important financial center of the world, which continental Europe still lacks.
“If the EU fails to create a system after 2022 that can handle what the City of London now does, it could cause a major shock to continental finance,” Kovanda said. However, according to him, the city has been developing for decades and it is difficult to imagine that in a few years an institution could be established in Europe to completely replace it.
In any case, all experts agree that some partial agreement between London and Brussels in some areas of economic life may eventually take place.