It has always been like that. There is the power of the street, and there is the power of the banks. In Catalonia, it looks like the silent message from the banks speaks more loudly that the boisterous streets.
Caixabank’s decision to move its legal headquarters out of Catalonia to calm investors is only the top of the iceberg. More than 1,300 companies have transferred their legal headquarters out of Catalonia due to the current uncertainty, according to the national companies’ registry. The message is clear. Those who want independence, but also those who don’t, need to prepare for utmost economic hardship. Separatists, of course, assume independence will have a price, but how big the price? That is the question.
UK is not Catalonia and Catalonia’s independence drive is not Brexit. But a similar migration of banks is taking place there, if not much bigger. Around 40 banks and financial institutions are planning to relocate from the UK to Frankfurt because of Brexit. Britain’s departure from the EU “won’t be a piece of cake”, top German bankers warn, with consequences which need to be taken into account and prepared for. Moreover, the banks currently stationed in the UK have been warned that they cannot “fly and drive” (park and ride?) by establishing letterbox companies in the EU and keeping their infrastructure on the British isles.
If Theresa May asked in her Florence speech for a two-year transition period after Brexit, it’s because the Bank of England needs such a transition. Will banks really leave Britain after Brexit? Or better still, will banks allow Brexit to happen?
On the other side of the Atlantic, if Donald Trump looks relatively stable despite his political blunders and all the skeletons in his closet, it’s because the banks like him. Trump promised to free them from the Dodd-Frank Wall Street Reform and Consumer Protection Act, adopted by the Democrats in 2010 to preserve financial stability and avoid another financial crisis. And this may be the only electoral promise he is bound to fulfill.
Trump’s economic plan, which so far lacks detail, focuses on the “massive” abolition of “anti-growth regulation” and the establishment of a “new modern regulatory framework”, which will allow banks to lend money. And make American banks great again.
The Sakharov prize celebrating freedom champions was given to the Venezuelan opposition today.
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MEPs call for stronger protection for whistleblowers, in the wake of corruption scandals, and despite attempts of right-wing MEPs to water down text.
Competition Commissioner decided today to open an investigation into UK tax cuts to multinationals. A move likely to be unwelcomed by Brexiteers.
Development aid is the sticking point between MEPs and Council in ongoing budget talks.
Italy announced coal phase-out by 2025, joining a host of EU countries seeking to dump the black stuff.
President of the Institute for New Economic Thinking said in our interview he was hired by Soros for Black Wednesday, using insecurity as a catalyst for change. But “a good economist is mindful of the consequences for all people”, he said.
S&D leader Pittella seeks clear distinctions between left, right, and “Orbánisation.”
Serbia isn’t “sitting on two chairs” – Serbian PM rebukes US diplomats’ comment on the country’s uncomfortable position between Moscow and the EU.
Nuclear power’s waning appeal could be saved by small nuclear reactors. Nuclear’s new (nano) dawn?Read our interview with nuclear industry chief.
Look out for…
Men of science Juncker and Macron travel to French Guyana to visit Europe’s Space Agency, while Frans Timmermans travels to the Vatican to open conference on the “Chritsian contribution to the EU’s future”.
Views are the author’s