Banking Union Threatens to Drive UK Out of the EU


With a European banking union forming and London at risk of losing its status at the world's most important financial center, the UK is being forced to confront the issue of its continued participation in the European Union. If the EU indeed becomes more federal in character, the UK could withdraw as a member and take its chances going it alone. But this would have risks of its own.

The EU's proposed banking union poses a direct threat to London's dominant position in European financial markets, ranging from foreign currency trading to derivatives to investment banking. Members of Parliament rebelled this week, with Prime Minister David Cameron losing a vote on the EU budget - a sure sign that the financial crisis in the eurozone has stirred up enough opposition to the EU for the British to stay out of a single currency and attempt to claw back the powers that it has given to Brussels.


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