Scotland is scheduled to publish this week proposals concerning its staying in the EU single-market in the context of the UK’s Brexit vote from earlier this year, Reuters reported, citing data from the Scottish government. The move aims to avoid the “national disaster” of a hard Brexit. Its government is set to receive new powers post-Brexit.
“We will set out compromise proposals which, while not conferring the full benefits of EU membership, would mitigate the Brexit damage,” said Michael Russell, the Scottish government’s minister for EU negotiations.
The UK voted on 23 June, 2016, to exit the European Union (Brexit), causing markets to experience deep volatility. Financial institutions across the EU, and in the UK in particular, are facing significant challenges as a result of the Brexit vote since a license issued by UK’s Financial Conduct Authority (FCA) currently provides admission to all countries in the European Economic Area (EEA), but soon FCA license holders will lose access to these markets. As a result, many forex brokers are expected to fleet from the country. Now that UK Prime Minister Theresa May has said she will trigger Article 50 of the Lisbon Treaty, the formal process of leaving the EU, by the end of March to start two years of exit talks, the future is even more uncertain.
On the referendum, Scotland was strongly in favor of staying in the EU, although its vote was muffled by that of the rest of the UK areas. According to Russelk, exiting the EU would be a national disaster for Scotland, threatening 80,000 people from losing their jobs over a decade.
“Brexit presents everyone with an unprecedented challenge, and with political goodwill on all sides and a willingness to cooperate, these proposals can effect a solution for Scotland,” Russell noted, as cited by the media.
The way things are going, it will not be a surprise if Scotland holds a second referendum for becoming independent from the UK. The first Scottish independence referendum took place in September 2014.
However, at this point nothing is certain. May has promised to negotiate with the Scottish government, as well as these of Welsh and Northern Ireland, to come up with unified decision on the Brexit issue.
The UK is the world’s largest forex hub, accounting for some 37% of the world’s forex trading volumes and a potential change would affect a number of market participants.
In the Brexit context, Ireland’s central bank has announced readiness to accept UK-regulated financial entities seeking authorization under an alternative jurisdiction.
Some other EU countries, including Spain, have also showed interest in taking over FCA-licensees seeking to exit the UK.