Narrow opportunity to avoid the Brexit

Financiers, investors and bankers pushed a sigh of relief when David Cameron and the Conservatives have won the latest general elections in the United Kingdom (UK) by a large margin and have even gained the absolute majority at the Parliament. This unexpected development, according to opinion polls, has given back the City hope that the UK will eventually not leave the European Union (EU) because Cameron, who promised a referendum to his fellow compatriots, is apparently against the Brexit. And Cameron always wins, thinks the City. Even a victory of the Labour would have been nothing close to the nightmare a Brexit would be for the London’s financial sector. Cameron’s victory has just been one more positive step that something “realistic” can now be done to convince the UK people that leaving the EU will rather be a long-term issue than a durable solution. A second positive step actually since the no vote over the independence of Scotland has started a trend quite favorable to the City.

Indeed, the UK financiers consider the cost of a Brexit would not only put an end to London’s world-class leadership in the financial sector but also put the whole UK economically and politically away from what is, after all and despite all ongoing difficulties, the most strategically important place in Europe: Brussels. Furthermore the United States, and particularly the White House, keeps putting the pressure on its British ally, affirming that quitting the EU would be a major mistake that would drastically reduce UK’s influence instantly and, indirectly, the US influence in Europe too. The fact is, however, that the more the City defends the UK’s membership to the EU, the more the people questions which interests the EU is really defending. That’s why Cameron will have to explain why the financial sector, whatever its flaws, is an essential part of the national economy and how marginalizing it on the European scene will obviously harm the UK’s economy as a whole.

Cameron will also have to develop relevant points that don’t relate to the City and prove the European Community then the EU has brought more positives than negatives to the UK since 1973. Lastly, convincing his own people won’t be enough since Cameron will have to envisage real concessions in order to regain trust from his most important European partners, mainly Germany and France, who have less and less tolerance for the UK’s “à la carte” EU membership. Their requirement for Cameron that you’re either fully in or you’re out will likely polarize the UK’s public opinion, if not Cameron himself. After two positive steps from the City’s standpoint, and an undisputed electoral success, Cameron seems more able than ever to prevent the Brexit but the window of opportunity is narrow and time-limited.