The City of London is rarely starry eyed about anything. But even by its hard-boiled standards, the Square Mile has always been ambivalent in its attitude to the EU. While it relishes the opportunity presented by the single market in financial services, it also fears that Brussels might be some sort of Trojan horse for continental countries that are intent on snatching its business away.
In the years since the financial crisis, the concerns have been in the ascendant. The Square Mile has clashed with Brussels over the possibility of an EU-wide tax on financial transactions and the latter’s desire to place curbs on bankers’ pay. The City also worries that the regulatory change accompanying banking union may ultimately prove to be a ploy to bind London in red tape, eroding its competitiveness as a financial centre. David Cameron’s renegotiation of Britain’s EU membership has sought to establish “safeguards” to protect against this perceived threat.
Nonetheless, when the possibility of exit is raised, few big financial institutions want to surrender that extra business. They would rather see the UK stay and fight its corner than depart.