20 February 2016

BBC: How does EU deal affect UK's position outside the eurozone

A binding undertaking has now been agreed by all 28 heads of state and government not to introduce any legislation which may discriminate against non-Eurozone countries.

Euro, pounds, krona and zloty

So all this means there is now a formal recognition that the EU has several currencies, not just the euro.

That matters when it comes to new laws because the EU Commission can no longer draw up rules with the 19-country Eurozone mostly in mind. It is now legally obliged to include UK, Polish and Swedish concerns - as well as those of any other non-Eurozone member states - when it is drafting legislation.

For the City of London, this matters. The European Central Bank will no longer be able to force payments in euros to be cleared (or formally processed) in a Eurozone member state.

Nor can, for example, a German or Italian regulator try to coerce one of its banks to move parts of its business or even its senior management from London to Frankfurt or Milan.

What else matters to business?

Beyond financial matters, there have been clear and formal commitments in the Brussels agreement to cutting red tape and encouraging growth and job creation for the entire EU. That's been an informal aspiration up to now.

This means that the EU Commission must now ask itself whether a proposed new rule is necessary at all and whether it should be monitored by a local regulator rather than by the commission itself.

Finally the Brussels agreement gives formal political weight to the EU developing closer international trade deals such as with Japan, India and the on-going talks with the US called the Transatlantic Trade and Investment Partnership (TTIP).

The government has said that British companies would benefit from much closer trade deals with giant emerging economies to reduce its dependence on its EU trade partners which currently account for up to half of UK exports.

Full article on BBC

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