6 ms·

How is delusional? If the EU wants it, they pass the necessary regulation and /bam/, it's the law and it's done. But maybe just the power to do so is enough to

How is delusional? If the EU wants it, they pass the necessary regulation and /bam/, it's the law and it's done. But maybe just the power to do so is enough to secure the EU/ECB's objectives. Doing it just for the jobs would be a bit petty.

runeks 10y ago
I see how the EU can control EUR derivatives within the EU, but I fail to see what kind of legislation the EU can pass that will have an effect in the U.K. What would the legislation involve? A derivative is just a contract between two parties saying EUR must be paid upon a list of conditions. How is the EU going to stop this? I'm arguing that if they did pass a law that just bans foreign derivatives trade outright, the trade would simply move to a country less friendly to the EU than the UK. And the EU knows this, so they're backing off with the legislation, since they consider themselves better off with the middle-way of at least containing it in London.
- zigzigzag 10y ago
  The type of legislation in question is quite familiar to us when named as it normally is: as a trade sanction. Essentially the EU just passes a new regulation (note: EU Commission can make new law that overrides national law and it is not accountable) that states you cannot purchase services in categories X, Y and Z from the UK on pain of fines or imprisonment. No different to any other trade sanction. It is not legally complicated to implement.
  - gpderetta 10y ago
    EU commission can't pass new law, that's the prerogative of the EU parliament which is directly elected by European citizens and as such fully accountable.
    - zigzigzag 10y ago
      That's exactly the opposite of reality: https://en.wikipedia.org/wiki/European_Parliament https://en.wikipedia.org/wiki/European_Parliament From the first paragraph under "powers and functions" The Parliament and Council have been compared to the two chambers of a bicameral legislature.[44] However, there are some differences from national legislatures; for example, neither the Parliament nor the Council have the power of legislative initiative (except for the fact that the Council has the power in some intergovernmental matters). In Community matters, this is a power uniquely reserved for the European Commission (the executive) The thing they call a Parliament can't actually change anything about the EU. It can only ask the Commission to do so for it.
      - gpderetta 10y ago
        The European Parliament doesn't have the power of legislative initiative, but laws must be voted, possibly significantly amended, and finally passed by the parliament (and council) [1]. As far as I understand, the Parliament has the right to ask the Commission to submit a law, and although the Commission is not bound by it, by consuetude it does. So, de-facto, it has initiative power. [1] in some some areas (market exemption and competition) the Parliament only has a consultative role, although it can still filibuster a law. This consultative role was eliminated in the European Constitution Treaty, giving Parliament full voting right on all laws, but that treaty was rejected (it is as if people don't want the EU to become more democratic!)
edblarney 10y ago
"they pass the necessary regulation and /bam/, it's the law and it's done." You do not move a trillion dollars in clearing simply by passing a law. These things are deeply entrenched in law, culture, talent, eco-systems, support systems, staff etc. etc.. It would be like saying 'America just needs to require all products sold in America are manufactured here /bam/ - it's done'
- zigzigzag 10y ago
  America does pass laws like that, frequently. Things related to defence, for example. The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that.
  - edblarney 10y ago
    I think your conflating a little in both examples. Everyone understands that 'defence' contracts are geopolitical, and there have always been expectations around those controls - from parts to purchases - so it's already in the system. "The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that." All of those points are not appropriate. There will not ever be any 'trade sanctions' for UK doing clearing of EU dollars. Nobody is even suggesting that. To do so would rattle all markets internationally, and kill confidence in the Euro. The Euro would lose 20% of it's value overnight, and would never recover. The UK could not do the same in reverse (how does it ban the EU from doing Euro cleared transactions?) And Brexit is not a 'trade war'. It's just Brexit. The 'worst case scenario' is the UK is a country that trades with EU like any other: USA, Japan, Canada. There is no 'trade war' between USA and EU. The issues regarding EU wanting to have it's clearing within it's own jurisdiction are reasonable, but the system can't be changed overnight. The EU is about to go through another crisis because Italian banks are about to default, and all of that lending goes through London. So guess who the EU needs? Brexit will probably work out with some kind of trade deal, specifically involving financial services.
sgt101 10y ago
Also blam! The Euro and EU economy collapse... Over time, yes... Possibly...

runeks 10y ago

I see how the EU can control EUR derivatives within the EU, but I fail to see what kind of legislation the EU can pass that will have an effect in the U.K. What would the legislation involve? A derivative is just a contract between two parties saying EUR must be paid upon a list of conditions. How is the EU going to stop this? I'm arguing that if they did pass a law that just bans foreign derivatives trade outright, the trade would simply move to a country less friendly to the EU than the UK. And the EU knows this, so they're backing off with the legislation, since they consider themselves better off with the middle-way of at least containing it in London.

zigzigzag 10y ago
The type of legislation in question is quite familiar to us when named as it normally is: as a trade sanction. Essentially the EU just passes a new regulation (note: EU Commission can make new law that overrides national law and it is not accountable) that states you cannot purchase services in categories X, Y and Z from the UK on pain of fines or imprisonment. No different to any other trade sanction. It is not legally complicated to implement.
- gpderetta 10y ago
  EU commission can't pass new law, that's the prerogative of the EU parliament which is directly elected by European citizens and as such fully accountable.
  - zigzigzag 10y ago
    That's exactly the opposite of reality: https://en.wikipedia.org/wiki/European_Parliament https://en.wikipedia.org/wiki/European_Parliament From the first paragraph under "powers and functions" The Parliament and Council have been compared to the two chambers of a bicameral legislature.[44] However, there are some differences from national legislatures; for example, neither the Parliament nor the Council have the power of legislative initiative (except for the fact that the Council has the power in some intergovernmental matters). In Community matters, this is a power uniquely reserved for the European Commission (the executive) The thing they call a Parliament can't actually change anything about the EU. It can only ask the Commission to do so for it.
    - gpderetta 10y ago
      The European Parliament doesn't have the power of legislative initiative, but laws must be voted, possibly significantly amended, and finally passed by the parliament (and council) [1]. As far as I understand, the Parliament has the right to ask the Commission to submit a law, and although the Commission is not bound by it, by consuetude it does. So, de-facto, it has initiative power. [1] in some some areas (market exemption and competition) the Parliament only has a consultative role, although it can still filibuster a law. This consultative role was eliminated in the European Constitution Treaty, giving Parliament full voting right on all laws, but that treaty was rejected (it is as if people don't want the EU to become more democratic!)

edblarney 10y ago

"they pass the necessary regulation and /bam/, it's the law and it's done." You do not move a trillion dollars in clearing simply by passing a law. These things are deeply entrenched in law, culture, talent, eco-systems, support systems, staff etc. etc.. It would be like saying 'America just needs to require all products sold in America are manufactured here /bam/ - it's done'

zigzigzag 10y ago
America does pass laws like that, frequently. Things related to defence, for example. The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that.
- edblarney 10y ago
  I think your conflating a little in both examples. Everyone understands that 'defence' contracts are geopolitical, and there have always been expectations around those controls - from parts to purchases - so it's already in the system. "The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that." All of those points are not appropriate. There will not ever be any 'trade sanctions' for UK doing clearing of EU dollars. Nobody is even suggesting that. To do so would rattle all markets internationally, and kill confidence in the Euro. The Euro would lose 20% of it's value overnight, and would never recover. The UK could not do the same in reverse (how does it ban the EU from doing Euro cleared transactions?) And Brexit is not a 'trade war'. It's just Brexit. The 'worst case scenario' is the UK is a country that trades with EU like any other: USA, Japan, Canada. There is no 'trade war' between USA and EU. The issues regarding EU wanting to have it's clearing within it's own jurisdiction are reasonable, but the system can't be changed overnight. The EU is about to go through another crisis because Italian banks are about to default, and all of that lending goes through London. So guess who the EU needs? Brexit will probably work out with some kind of trade deal, specifically involving financial services.

sgt101 10y ago

Also blam! The Euro and EU economy collapse... Over time, yes... Possibly...