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Brexit Anarchy In The U.K. Could Bring U.S. Financial Workers Home


In a little more than two months, the United Kingdom is set to leave the European Union. But the so-called Brexit process was thrown into chaos this past week after a withdrawal plan put together by Prime Minister Theresa May was resoundingly rejected by Parliament. However, Brexit - for now - goes forward. What could it all mean for those of us on this side of the Atlantic? To find out, we're joined now by Peter Spiegel, an American in London. He's also news editor of the Financial Times. Welcome.

PETER SPIEGEL: Thanks for having me.

GARCIA-NAVARRO: All right, so Theresa May says she can't completely rule out the possibility of Britain leaving the EU without an economic deal, a so-called hard Brexit. Many argue this would be disastrous for the U.K. What would that mean for the U.S.?

SPIEGEL: Well, look. I mean, Britain is still one of the largest economies in the world. And, you know, if you've seen - if you remember all the market turmoil that occurred in December, a lot of that was because of fears that the global economy was not only slowing but suddenly screeching to a halt. If, suddenly, you had Britain crash out of the EU, its economy grinding to a halt, it's going to have knock-on effects on Europe, which will have knock-on effects on the global economy, which will then start infecting the financial markets on Wall Street. So it's a large enough economy and there's enough trans-Atlantic trade that it could have an impact that could feed back into the U.S. economy.

GARCIA-NAVARRO: What would it mean, though, for Americans and American companies specifically in the financial services industry? They're very well-represented in London.

SPIEGEL: Yeah. I mean, that is the biggest American presence here in the U.K. I mean, the city of London, which is the financial center, is the second-largest financial center in the world after Wall Street. And to be honest with you, they're almost all American banks, right? It's JPMorgan. It's Morgan Stanley. It's Citigroup. It's the big names that everyone knows from Wall Street. They all have their biggest, you know, subsidiaries here in the U.K. And let's be honest. They're not here in London to serve British people. American bankers come here, and they do work for clients all over all 28 EU countries.

Well, suddenly, you know, if you're a banker at JPMorgan, there are rules that say, some products you can only sell to European citizens if you're in Europe. So already, we're seeing American banks making decisions. Do we need to move our people to Frankfurt? Do we need to move people to Paris? Should we bring them back to Wall Street? You know, is the U.K. going to be a place where we can do business anymore? Well, if they crash out without a deal, this gets sped up immediately.

GARCIA-NAVARRO: One of the things that was floated by the leavers was that the U.K. would be able to fashion a great trade deal with the United States, for example, off the back of Brexit. Trump, however, hasn't been very forthcoming on that. Any idea where that stands and what that might look like? Could that - could the United States be giving a lifeline to the United Kingdom if, indeed, Brexit goes awry?

SPIEGEL: I suspect not. I mean, look. The leavers were making this case well before Trump became president. What have we learned since Trump became president? He's not the easiest guy to negotiate a trade deal with. And there are a lot of things here that people are allergic to when it comes to - particularly, you know, American agriculture. You cite things like, you know, the hormones that go in American beef. They don't do that here in Britain. It's a real sort of hot-button issue. There are things the U.S. is going to demand for a trade deal. If you're a relatively small country like the U.K., you can't, actually, make any demands of the U.S., particularly if you're in a place where you've just cut off your largest trading partner, which is Europe. And you're desperately seeking a deal with the U.S. Trump's going to drive a hard bargain. So I'm not sure that hopes that existed three years ago that the U.S. could provide a trading lifeline are actually going to come to fruition.

GARCIA-NAVARRO: Give us a sense of where you think things stand at this moment. I mean, how likely is it that Britain's going to crash out of the EU? I guess that's the billions-dollar question.

SPIEGEL: I mean, I got to say the signs are looking very bad. You know, there's a whole lot of speculation that she can't get a deal here done in London. She may have to go to another round of general elections. You know, there is, of course, lots of discussion about a second referendum. Do the Brits go back to vote again about Brexit? Can they reverse it? I think it's less likely. But if they don't have another sort of democratic moment, I think the likelihood of crashing out of the EU is becoming increasingly likely. And I just don't see a way out for her at this point.

GARCIA-NAVARRO: Peter Spiegel of the Financial Times, thank you so much.

SPIEGEL: My pleasure. Transcript provided by NPR, Copyright NPR.

Lulu Garcia-Navarro is the host of Weekend Edition Sunday and one of the hosts of NPR's morning news podcast Up First. She is infamous in the IT department of NPR for losing laptops to bullets, hurricanes, and bomb blasts.