EU Economics

‘Brussels needs London’ City holds major Brexit card as EU CAN’T give up financial hub

LONDON holds a major Brexit card as the European Union will not want to lose its value, an expert has said.

Finance lobby group chief Simon Lewis said the city offered a “win-win” for the UK as it proceeds with exiting the Brussels bloc.Speaking on Sky News, Mr Lewis said the “big challenge” for the EU was economic growth, something London has a major impact on.

Presenter Ian King asked the finance chief whether the bloc would want to protect the city.

He asked: “You and your team spend an awful lot of time in Brussels. Do you think there’s a desire to make sure that the city is looked after?

Finance Canary WharfSKY NEWS•GETTY                 Simon Lewis said London was vital for the EU and offered the UK an “opportunity” in Brexit talks

The reality is if London gets completely detached from Europe, capital markets activity in Europe is going to be affected

Simon Lewis

“After all the city services the whole of the EU and provides value for them as well, it’s not just a British thing.”Mr Lewis replied London was vital for the bloc and offered the UK an “opportunity” in Brexit talks.

He said: “Think of how much capital markets activity comes through London. So I think the reality is if London gets completely detached from Europe, capital markets activity in Europe is going to be affected as well.

“The big challenge for Europe is economic growth. A fragmented capital market in Europe means less economic growth.

“So there’s sort of an opportunity to have a win-win here I think.”Meanwhile, the Italian government has made an emergency intervention to wind up two crumbling banks which threatened to “collapse” their economy and possibly the entire European Union.

Veneto Banca and Banca Popolare di Vicenza were both liquidated after an emergency decree was enforced to shield depositors and senior bondholders from losses.

Rome’s move follows a decision by the European Central Bank, which on Friday evening declared that the two regional banks in Venice “were failing or likely to fail”

Speaking to CNBC, he said: “Liquidation in the case of the two Venetian banks is the best possible options to be consistent with European rules, and fully consistent with the aim of preserving retail money, retail savers and depositors and also activity funded by the bank by the banks.”

In recent months leading banking analysts have warned Italy poses the biggest threat to the EU.

Italy has been one of the EU’s financial weak lines for years after racking up enormous debts thanks to bad loans.

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