Brexit Bulletin: Europe, Heal Thyself
(Bloomberg) -- Today in Brexit: With Italy dominating the headlines, a prominent anti-Brexit voice has a warning for the EU.
Less than two years after the Brexit vote, a new crisis is brewing in Europe.
Political turmoil in Italy rocked global markets yesterday, sparked by the prospect of anti-Europe, nationalist parties turning an election into a de facto referendum on Italy’s membership of the euro. Bond yields soared and the single currency fell. The British pound didn’t escape the selloff, falling to a six-month low against the dollar as investors sought the safest assets.
The turbulence, greeted with glee by some pro-Leave campaigners in Britain, recalls the chaos of the region’s debt crisis earlier this decade. It also serves as a timely reminder that the U.K.’s rocky process toward the exit isn’t quelling anti-EU movements across the continent, and that Europe’s problems do not stop at Brexit.
One man all too aware of that is billionaire George Soros. The investor, who is backing a U.K. pressure group called Best for Britain, gave a speech in Paris yesterday saying that the European Union needs to fix the fragile architecture of the 19-member euro area and make sure that its weaknesses don’t destroy the project.
Best for Britain, which is fighting to keep the U.K. open to EU membership, campaigns to secure a second Brexit referendum within a year, the Guardian reported. Soros said the group will publish a manifesto in the coming days.
Still, while Soros warned that the withdrawal from the bloc is “immensely damaging” and “harmful to both sides,” he added that the EU needs to make sure it is strong enough to attract the U.K. back in.
Failed economic and immigration policies mean that “it is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality,” Soros said.
“The economic case for remaining a member of the EU is strong, but it will take time for it to sink in,” he said. “During that time the EU needs to transform itself into an association that countries like Britain would want to join.”
- The EU is weighing a much-stronger warning on the risk of Brexit talks collapsing without a deal if the U.K. fails to lay out its position in more detail next month, according to a person familiar with the matter.
- Europe’s banks are bracing for regime change at the top of the ECB, which will replace three of its top bank supervisors at the start of next year. The new appointees are set to arrive just as Brexit kicks in – with or without a transition period – putting extra pressure on the watchdog in case Britain’s withdrawal disrupts the financial system.
Brexit in Brief
Extra Hands | The Bank of England has denied that there’s a rift with the government over regulation after Brexit, but it’s not taking any chances. The central bank is looking to expand the team that handles EU withdrawal work.
East to South | The EU’s regulatory arm proposed a new method for distributing regional aid under its first post-Brexit budget, shifting part of the funds from eastern Europe to countries in the south of the continent that face unemployment and migration challenges.
Beyond Brexit | The struggles of the U.K. High Street aren’t just about Brexit, Bloomberg Opinion’s Lionel Laurent argues.
Expert Help | UBS has hired Lord Jonathan Hill, former European Commissioner and member of the British Cabinet, to advise on Brexit and other political issues.
Major Burden | European regulators are aware that preparations for Brexit “demand considerable expenses, resources, time and effort,” and may require the modification of millions of contracts, German Deputy Finance Minister Joerg Kukies said at a conference in Frankfurt.
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