London has been a global financial center for more than a hundred years, but even more so over the last few decades with deregulation and globalization. That status is now under question.[related_stories]
As we noted in our paper “To Leave or not to Leave: Brexit and Implications“, one possible path for Britain is to follow the Norway model: access the single market by becoming a member of the European Economic Area (EEA). This obviously comes at a price – unfettered movement of European citizens across borders, accepting EU regulations and contributions to the bloc’s operating budget – all of which ‘Leave’ supporters explicitly campaigned against. The open door immigration policy was a prime motivator for most voters choosing to leave. At the same time, Britain will no longer have a say in creating EU laws.
Another alarming aspect is that Britain apparently lacks the skills to go it alone on trade deals with the EU and the rest of the world. The European Commission has taken the lead in trade negotiations for the past four decades, leaving the country bereft of people equipped with the right technical knowledge. Negotiating trade deals takes such intense effort that even concluding them in five years is considered an achievement.
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