We have run out of money, which is to say that businesses big and small, have run out of money, and the government, pledging support, has no money of its own, and is running out of that. However, Europe has run out faster because of the greater panic and harsher measures there (apart from Sweden, which seems to be getting on well).
German businesses will need cash the moment they come out of lockdown, and for many years afterwards. They are not so naïve as to think that the wave of pent-up consumer spending that will be released will fill the ledgers again. There must be another source of cash or there is cataclysm.
In the meantime, the trade talks are continuing with the European Union. The coronavirus may have brought a pause but as I wrote earlier, the calendar has not stopped running out, and the EU’s negotiators know that Boris and his team are not going to extend it that way Theresa May would have done. A great deal of action has taken place by remote conferencing and electronic communications. There will indeed be a British text, delayed from the date is was to have been put down, but there on the table shortly.
Before the plague, Brussels had pledged to cut the City off, to force Britain’s hand in other aspects of negotiation. Behind the bluster there are real lives and livelihoods in danger, and Europe’s commerce has run out of money.
The lockdown recession empties the lungs of business and stops the breath and even the strongest are left scarred. For those which survive, filling the limp body with life again will need hard cash, and it is not in Frankfurt nor anywhere else in Germany; that money can only be supplied through the wide net and innovation which the finance houses of the City of London can provide. (Only New York comes close, which is equally outside the European Union, and six hours behind.)
The City brokers and banks trade in the long term. They are backed by the world’s most trusted courts and laws and speak the world’s primary commercial language. This is why London is the largest financial centre in the world. In a time of unprecedented crisis, the City institutions are more flexible in its ways than regimented German systems permit. All this though has been recited countless times in endless publications, and bears tedious repetition only to emphasise that there is no substitute for London: Paris and Frankfurt cannot ride to the rescue alone.
Wisely, the government included stockbrokers (those involved in “financial market infrastructure”) as “key workers” expected still to be working during the lockdown.
Germany and Europe can be rescued by London. The European negotiators might have sounded tough, but they are now faced with the starvation of families and the wholesale buying up the wrecks of businesses by outsiders. They should be begging for European businesses to have continued and freer access to the City of London.
- Meanwhile, in Brussels
- Praying for Boris
- Where is the text, Boris?
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- Brexit: Why Britain Voted to Leave the European Union by Harold D. Clarke, Matthew Goodwin and Paul Whiteley
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- Brexit and Ireland: The Dangers, the Opportunities, and the Inside Story of the Irish Response by Tom Connelly
- Beyond Brexit by Vernon Bogdanor
- From Partition to Brexit: The Irish Government and Northern Ireland by Donnacha O Beachain
- Brexit: Its Necessity and Challenge by Tony Kosuge
- Rising Tides: Facing the Challenges of a New Era by Liam Fox
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