Outlook What’s this, a victory for George Osborne in Europe? Sacré Bleu!
A few years ago, certain members of the eurozone – and you won’t be surprised to learn that this included our friends just across the Channel – got fed up with the fact that most of the trading in euros took place in the capital of the country that opted out of the single currency.
Having endured the pain of setting the thing up– and the economic ructions which have followed – it’s understandable that they were after a few crumbs of comfort.
Hence the European Central Bank’s policy that clearing houses for euro trades should be located in the eurozone. Clearing houses sit between buyer and seller to ensure a trade proceeds smoothly. They are a key part of the financial infrastructure and are there to ensure the stability of the system. So the ECB claimed that it needed them under its eurozone thumb.
Unfortunately for the ECB, the European Court of Justice says that’s illegal under the single market.
Except that the policy was like that archaic English law which legalised the killing of Scotsmen in York if they were caught holding a bow and arrow. Those parts of the City that noticed it are quite pleased, in an “oh, that’s nice” sort of way. The Treasury says an important point of principle was at stake and the policy could have put firms off coming to London. Despite there being little evidence of that.
If there’s any lesson to draw from the affair it’s that, despite the UK’s continual moaning, the European system can work in Britain’s favour. Who’d have thought it?