Brexit: UK Have To Pay Into EU Budget if British Banks Want To Trade in Europe

Brexit

The UK has to pay heavy amounts as contributions to the EU budget even after Brexit, If British banks want to have access to Europe’s financial markets, with plans being viewed in Brussels.

It is almost a year when England was deciding whether they wanted to leave or stay in the EU. During the London 2012 Summer Olympics, betting on sports become different than betting on political events. London Olympics hosted 26 sports, covering 39 disciplines and 302 events. Anyone could bet on 36 women in boxing, because this event was organized for the first time. Betting on mixed doubles in tennis was also possible, it was again included in the Olympics events since 1924. But, every citizen of UK knew that betting on sports, London Summer Olympics will delay the inevitable, the Brexit, which actually happened a few years after.

The conundrums which political and economic specialists were facing, analysts are making a joke that the only industry will benefit from the Brexit situation was the gambling one and they will, of course, referring to the bets on the outcome of the referendum since the “ideal” in this race lost and the bookies cleaned up. Forget about the fact that they could have won even more if they predicted the outcome more accurately, what avoided the discussions of the significant picture were the implications for the gambling industry after 52% of the Brits voted for to exit the European Union.

We will discuss more about gambling industry’s benefits after we will get some more guidelines which Britain will maintain after or prior to Brexit. For now, payments would be on top of the £39bn separation bill agreement by Theresa May, which will cover only the British liabilities to the EU.

German officials told the Bloomberg newsgroup that a trade deal with the UK could only add financial services if the UK makes payments to Brussels and proceeds with EU law.

The position risks angering Conservative Brexiteers, including Foreign Secretary Boris Johnson, who ended the payments to the EU budget after Brexit a red-line – but maintained the City would still be able to succeed and rise even when Britain has left.

In the start of this week Michel Barnier, the European Commission’s chief negotiator, stated in a speech that a free trade agreement “may include requirements on regulatory cooperation” for business services in line with those between Japan and the EU.

But he also said that with Britain leaving the EU, its “financial service providers can no longer enjoy the advantages of a passport to the united market nor those of a system of generalized equality of standards”.

5,400 British companies rely on passporting rights to make in £9bn in revenue every year to Britain. The British Bankers’ Association (BBA) has said the end of passporting would be “disruptive, costly and time-consuming”.

The request from German officials comes as the EU announces a huge £11.5bn shortfall in its income from sources right now, “because of Brexit”.

“We have two main problems – we have a gap on the revenue side, and a gap on the expenditure side,” Günther Oettinger‏, the commissioner for the EU’s budget, told reporters in Brussels on Wednesday.

“The revenue gap is because of Brexit: following a transition phase, we will have a situation where the UK, a large country, and net contributor, are leaving the EU.”

 

But, the UK to keep on paying to come from Germany is not surprising, given that the responsibility of making up any shortfall will be a burden for Germany itself.

 

The EU’s annual budget, for now, is around €105 billion a year, or £92.8 billion. The highest gross contributors ahead of the UK are Germany, France, and Italy, who give around 21 percent, 16 percent, and 14 percent respectively. The UK contributes 13 percent. The UK was the second largest net contribution, but, behind Germany. Only nine of the 28 states are pure contributors to the budget.

 

Jean-Claude Juncker, the European Commission president on Monday, said the Commission’s “working hypothesis” would be that “our British friends will be leaving us” and that future spending had to be planned accordingly.

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