European Single Market: Will Britain stay in?

London, too, is booming. Eurocrats never had much sympathy for financial services. As their regulations took effect – a financial transactions tax, a ban on short-selling, restrictions on clearing, a bonus cap, windfall levies, micro-regulation of funds – waves of young financiers brought their talents from Frankfurt, Paris and Milan to the City.

Britain's banks could lose automatic access to the financial centres of the European Union after Brexit, the European Central Bank has warned.London's banks and financial services giants depend on a so-called 'EU passport' to operate unhindered in capital markets across the Continent.And that passport could be withdrawn according to a veiled threat from ECB Governing Council member Francois Villeroy de Galhau today, according to Reuters news agency.If Britain fails to secure continued access to the bloc's single market in its exit talks, this would make it difficult for UK banks to keep most of their staff and operations in London.'If tomorrow Britain is not part of the single market, the City cannot keep this European passport, and clearing houses cannot be located in London either,' Villeroy told France Inter radio.Villeroy, who is also governor of the Bank of France, added that Brexit talks must be quick to limit uncertainty.'There is a precedent, it is the Norwegian model of European Economic Area, that would allow Britain to keep access to the single market but by committing to implement all EU rules,' he said.'It would be a bit paradoxical to leave the EU and apply all EU rules but that is one solution if Britain wants to keep access to the single market.'Difficulties for Britain's financial giants with access to the EU would present an opportunity to rival finance centres like Paris and Frankfurt.

In his column for The Telegraph, Mr Johnson said: “I cannot stress too much that Britain is part of Europe, and always will be.“EU citizens living in this country will have their rights fully protected, and the same goes for British citizens living in the EU.“British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and to settle down. As the German equivalent of the CBI – the BDI – has very sensibly reminded us, there will continue to be free trade, and access to the single market.

A German industry boss has said it would be "very, very foolish" to impose tariffs on UK goods if Britain votes to leave the EU.Markus Kerber, the head of BDI, or federation of German industries, is urging Germany and the EU to create a free-trade regime that could be imposed in the event of Brexit."Imposing trade barriers, imposing protectionist measures between our two countries – or between the two political centres, the European Union on the one hand and the UK on the other – would be a very, very foolish thing in the 21st century," Mr Kerber told the BBC's World Service."The BDI would urge politicians on both sides to come up with a trade regime that enables us to uphold and maintain the levels of trade we have, although it will become more difficult."

Remainers and "liberal Leavers" – to use a loose term – are suddenly on the same side. They both seek a safe settlement that protects Northern Ireland and Scotland, and the economy.Boris Johnson, Dan Hannan, and others in the sovereignty camp are signalling that they could live with a Brexit compromise that accepts EU migrant flows,  but going back to pre-Maastricht rules that guaranteed only the right to work, before the concept of EU citizenship. This would be a modified variant of the Norwegian Model, or European Economic Area (EEA).A "soft-Brexit" would be accepted by the vast majority of Parliament, which has a duty in these unique circumstances to act on behalf of citizens who voted for Remain and as well as for Leave. This is not an event where the winner takes all.(….)An EEA-style compromise may be the only safe way to reconcile a divided country and ensure a safe withdrawal from the EU in managed stages.