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Goldman Sachs warns EU exit would hit financial services

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Goldman Sachs is warning that a UK exit from the EU would “severely compromise” its ability to sell financial services across the continent.

The Telegraph reports that Goldman Sachs economic analyst Kevin Daly said an exit would amount to a “loss/loss scenario” for both the UK and the EU.

Prime minister David Cameron is backing a draft bill that pledges to hold an in/out referendum on EU membership in 2017. It is a private members bill backed by Tory MP James Wharton and currently only has the support of the Conservatives so is unlikely to pass.

Goldman Sachs says there would be a “significant economic cost” to the UK if it left the EU as the bloc makes up 16 per cent of UK gross domestic product.

Daly says: “Given the size and importance of the UK economy, it is unlikely that the UK could negotiate the same access to the EU single market that Switzerland and Norway have achieved.

“In particular, the UK’s ability to conduct business in financial services across the EU is likely to be severely compromised by a departure from the EU.

“We believe that a UK exit from the EU would represent a ’loss/loss’ scenario for both the UK and the EU. However, it is likely that the loss would be greater for the UK than for the EU.”

Despite its warnings, Goldman Sachs says it “doesn’t appear likely” a referendum will take place because the Conservatives need to win an outright majority in the 2015 election.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. RegulatorSaurusRex 21st May 2013 at 11:11 am

    Vested interests.

  2. everyone seems to think that an exist would bring to a sudden halt all economic trade with Eurozone – It wont have any difference in exchange rates, business relationships etc etc. It will however bring back powers to t he UK government to run UK plc as it sees fit via democratically elected politicians. Whether that is better or worse is still to be decided but at least it will be decided here and not by some eurocrat in brussells. It will save us billion a year in EU costs, billions more by not having to pay for useless changes that bring no beneift to Uk. Getting rid or the Euorpean human rights act will save billions more and the UK can finally cut a lot of red tape forced on UK plc that creates barriers to investment and growth. Bring on the exit

  3. Michael Fallas 21st May 2013 at 2:39 pm

    There is a price to pay for freedom to make your own decisions, decide your own VAT rates without limitations and use your own laws and not have others dictate them for you etc..

    The Financial Transaction Tax looks like it will happen whether or not we are in the EU, yet it affects UK financial Services far far more than any other European country so is in effect a tax on doing business via the UK. Hardly a fair tax and clearly designed to hit UK business which hardly gives anyone confidence in the EU acting in our best interests.

    So the real question is where are the benefits as I have yet to hear anyone tell us what these actually are in real terms that are quantifiable.

    My understanding is we are a net contributor to the EU with Luxembourg getting the most money from the EU per head of population, so leaving may save us something.

    If our products and services are good then I see no reason why other countries will not buy from us and we can fortunately still decide on our own currency unlike those stuck with Monetary Union.

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