(Editor’s note: On 29 March, the original Brexit date, Prime Minister Theresa May’s deal to leave the European Union was voted down for a third and final time. Meanwhile, officials in European Union countries including France and Spain are struggling to develop coherent no-deal Brexit policies for their British citizens. See our post here with a complete list of which European countries have guaranteed British expats a transitional period in the event of a “hard” Brexit. Also, see our running account of Brexit developments here. Laura Kaye in Berlin contributed to this post.)
In June 2016, Britain voted to leave the European Union after a small group of nationalists sold British voters a simple message: Brexit will be a quick and easy return to greatness.
In July 2018, the Sunday Times, which supported leaving the EU, reported a plan to use the British Army to distribute food, medicine and fuel should the country collapse this month in the event of a no-deal Brexit.
Former Prime Minister Theresa May repeatedly tried – and failed – to renegotiate leave terms acceptable to the European Research Group, the far-right block of Tory MPs who demand a hard Brexit.
With the third Brexit deadline now 31 October, there’s still zero clarity about how Brexit will end.
Here are just a few of the many, many options:
- No deal
- A second referendum on leaving the EU, which the Conservative Party adamantly opposes
- Whatever, if anything, Boris Johnson can hammer out with the recently elected EU leadership
- Submit your own plan
Moving toward three years since Brexit vote, the only certainty in uncertainty.
If there’s a lesson here for all nations, it’s the power of simple populist messaging combined with the appeal of demagoguery.
In this case, former United Kingdom Independence Party leader Nigel Farage, newly elected Prime Minister Boris Johnson and Michael Gove, formerly U.K.’s agriculture secretary, made promises no one could keep, from Brexit diverting 350 million pounds per week to the National Health Service instead of the E.U. to new and better trade agreements negotiated with individual E.U. countries via the World Trade Organization.
Quotes such as “easiest negotiations in human history,” “Britain holds all the cards” and “take back our country” tripped off the tongues of Eurosceptics, who described a brave new world of rainbows and unicorns.
Unfortunately, May’s Conservative government proved incompetent at bargaining from a position of weakness, the interests of one country against those of a union of 27.
Instead of improving its relationship with the E.U., after three years, multiple rounds of negotiations and finally a deal that never had a chance of making it through Parliament, May warned as she departed 10 Downing St. that a no-deal Brexit will mean catastrophe.
And that, as our Nina Avramovic put it all those months ago in her prescient post “Dear Brits; This is what it’s like to be a non-EU citizen,” means living in a whole new world of uncertainty, with limitations on travel, work and education.
If there is any agreement between EU and British officials, it’s that customs arrangements, transport treaties and arrangements for financial transactions will end suddenly without any transitional agreements being put in place.
And when that happens, everything changes. The bottom line, and there’s always a bottom line: A third country cannot have the same rights and benefits as an E.U. member state.
With a “soft” Brexit, the trade agreements, customs agreements and rules regarding the right of free movement between the U.K. and the E.U. would have remained in place during a transition period to new agreements. With a “hard” Brexit, there will be no transition, and the United Kingdom starts at zero on the same level as North Korea.
If you’re an expat – especially a British expat – what does the UK’s inability to reach an agreement with the E.U. mean?
Here’s how we think a no-deal Brexit will affect expats in Europe:
• Boris Johnson’s cabinet has a gift for stating the obvious. Home Secretary Priti Patel just stated freedom of movement for European Union nationals trying to enter the United Kingdom will end immediately on 31 October in the event of a no-deal Brexit. Which begs a goodly number of questions such as, “What will be the policy for people trying to enter the U.K. for business or pleasure? Will British policy makers have one set of visa requirement for all 27 E.U. member countries, or will they work up separate requirements for each country?”
What about EU nationals living in the U.K. trying to return home from vacation or business trips?
Will each customs official be left to make it up as they go? And how will officials know who’s who … who has a job and home in the U.K. and who doesn’t?
• If you want to see how Brexit – deal or no-deal – might work out for unskilled European expats in the U.K., look at the Windrush Scandal, and now the deportation of the Chagos people. The British government is in the process of forcing the Chagos to go back to … well, no one knows where because their island, Diego Garcia, is now a top-secret American military base.
In Windrush, first Theresa May, then Amber Rudd, oversaw an official policy to create a “hostile environment” meant to pressure people who’d been recruited to England in the 1950s from Jamaica and other former British holdings to supply low-paid labor.
Even though they’d been born in the United Kingdom or lived there legally for generations, some Windrush families were pressured to leave, deported or denied re-entry.
Now, British passport holders from the Chagos Islands in the Indian Ocean are being systematically targeted in an attempt to convince them to leave the UK. Imagine what will happen to the Poles who run so many of Britain’s carwashes, work in heavy industry and take care of older Brits at nursing homes.
To be clear, the UK has agreed to allow the 3.5 million E.U. citizens in the U.K. to remain. But they’re required to apply to continue living in the UK after 30 June 2021. Permanent residence document will not be valid after 31 December 2020, but EU expats will be allowed to stay in the U.K. until 30 June 2021.
To continue living in the UK, they’ll be required to apply to the EU Settlement Scheme or apply for British citizenship.
• Fervent Brexiteer Boris Johnson is making clear he’ll never agree to keep open the Northern Ireland/Irish Republic border, so future E.U./U.K. talks seem pointless. Which means a no-deal Brexit is almost a certainty. Three months from now, that will send government officials scrambling to figure out everything from how to keep airports open to how police will legally be able to continue sharing counter-terrorism information.
Most of all, though, those bureaucrats’ hair will be on fire dealing with the terms of residency changing for millions of expats in the United Kingdom, Spain, France and the rest of the 27 remaining E.U. countries.
Give Britain’s ambassador to Spain Simon Manley credit for nudging the 2 million or so Brits in Spain to get on with registering.
Expat news outlets in Spain are reporting that Manley has just reminded British nationals they need to be registered before 31 October to be eligible for Spanish government mandates covering a no-deal outcome, including on healthcare and residency.
• A lot of British expats in European countries still haven’t applied for the special residency permits they’ll need to remain in place. Yes, the deal to leave Theresa May negotiated guaranteed a long transition from E.U. citizens to third-country national status. But of course, that deal went exactly nowhere.
In a no-deal scenario, some E.U. countries such as Germany and France offer British residents as little as 90 days after a hard Brexit to establish their right to remain.
So it is not entirely impossible that in the event of a no-deal Brexit, a lot of Brits will get unannounced and unwelcome visits from immigration authorities in their countries of residence asking why they didn’t sign up. That said, even in a hard Brexit, the majority of E.U. countries are giving British citizens until the end of 2020 to get a grip on the transition to third-country national status from E.U. citizens. Still, some countries haven’t announced how long a no-deal transition will be.
If you or someone you love is an expat in an E.U. country … well, all expats need to know details of post-Brexit residence requirements for their respective countries.
You can see all the current information here.
• Brexit is already a dream come true for hard-line Brexiteers … fewer skilled workers from the European Union are considering the United Kingdom for executive positions. Which suits England Firsters just fine. But less access to highly skilled internationals is a nightmare for employers already finding it difficult to recruit top talent in a white-hot global economy.
Britain remains the first choice border-crossing talent from the EU, but its lead over the Netherlands, Germany and even Spain and France is narrowing, according to the Financial Times.
• One of the most baffling failures of Brexit is a failure after three years to get any real clarity about what happens to all the expats – British and European – spread out across Europe and the United Kingdom in the event of a no-deal Brexit.
European Union, U.K. officials and governments in expat centers such as Spain and Portugal have all said the right things. But codifying those pledges into law means E.U. countries and Boris Johnson must agree on reciprocity after three years of failing to agree on anything.
In mid-June, Brexit Secretary Stephen Barclay asked EU officials to “ring-fence” British expats, yet another baffling term to go with the Irish border “backstop.”
What ringfence means is a guarantee Brits in all 27 E.U. countries would have the same post-Brexit rights to remain, deal or no-deal.
Michel Barnier, the E.U.’s Brexit negotiator, said, “Sure … if you pass the plan we negotiated with (former) Prime Minister May.” Which the U.K. will never do.
Now what? Again, in the increasingly likely event of a no-deal Brexit, no one really knows because it could get ugly fast.
It is inconceivable that that British government, let alone a Conservative government, could allow the rights of British nationals, living, working, studying in the EU to vaporise on the 31 October.
Or is it?
• After three years, the ramification of a no-deal Brexit for expats is becoming clearer because more and more European Union members states have laid out in detail how they’ll treat British citizens in the event of a deal, or a no deal.
Nowhere is that difference more stark than Germany where in the event of a hard Brexit, British expats will have only an initial three-month period to apply for a residency permit. Even trickier, the grace-period offers of countries such as Poland and Spain are based on reciprocity.
Should a hard-line, far-right figure such as Nigel Farage or Jacob Rees-Mogg ulimately ascend to No. 10, it’s unlikely they would extend to foreign-nationals from the E.U. the right to remain in place.
Such a scenario could set off a wild scramble, with tens of thousands of people repatriating, putting immense pressure on housing and job markets.
May’s International Trade Secretary Liam Fox, who opposes a hard Brexit, went further on 4 June, telling the BBC the prospect of a no-deal “might well be used by those who seek to break up the United Kingdom, to use that as a weapon in that particular battle, both I think in Northern Ireland and potentially in Scotland.”
Those forces unleashed could throw the Europe as a whole into economic and social chaos.
• With a hard Brexit increasingly likely, British schools are trying to figure out how to replace their foreign students, or about 18 percent of the total enrollment.
One answer is to expand to mainland Europe. The New York Times is reporting King’s College St. Michaels in Worcestershire has opened a primary school in Frankfurt, a city that a uni executive predicted “could be the biggest beneficiary of any exodus that takes place.”
• We know from our networks and personal experience that expats are a force for good in small-town Europe from Spain and France to Turkey. And as Remain in Spain Chairwoman Sue Wilson notes, Brexit spurred her and a lot of Brits to become activists.
The Olive Press has an interesting look at the roles Brits and people from Nordic countries are playing in local Spanish elections where dozens of expats were on the ballots.
One of the profiles is Bill Anderson, a British political strategist who’s on the ballot with a Spanish official in a campaign to “restore security and cleanliness to the town’s streets, as well as reduce bureaucracy, encourage transparency and improve animal welfare.”
• Though nothing happened on the Brexit front before May’s resignation announcement, the endless wrangling and uncertainty has started to reverse Eastern Europe’s brain drain. Bulgaria, Romania and other countries in Emerging Europe have seen huge population declines in the past decade as the young and talented left. Now, one city is experiencing a renaissance. Plovdiv’s booming IT sector and laidback lifestyle is starting to look pretty good to Bulgarians who’d been working in the United Kingdom and elsewhere in Europe, according to The Guardian.
• First, Brexit drove out the financial institutions. Then the automotive industry started to leave. Now, Brexit sentiment could pull in the welcome mat currently extended to European students.
BuzzFeed News has reported Education Secretary Damian Hinds proposes ending the policy of charging EU students the same tuition as British students, increasing fees in the 2021/2022 school year whether Brexit happens or not.
The Tories have long argued that students should be counted in immigration statistics and treated as such.
British universities are among the best in the world … and the most expensive if you’re not a UK or EU citizen.
• As we noted earlier, Romanians see a silver lining in Brexit – they get their professionals back.
AFP has a post about health care workers returning from the United Kingdom, and fewer young doctors and nurses thinking about leaving.
“Lots of people from my generation have decided to come back to Romania,” the post quotes a the 23-year-old as saying, who added the outlook is improving at home.
About 4,500 Romanian doctors work in the UK.
• Once you’ve experienced freedom of movement, is there any going back? A lot of Brits are making the conscious decision to remain part of the EU and finding ingenious ways of doing it.
The Week/PRI has a post about Ana Silvera, who grew up in London, but has the right to Portuguese citizenship via her family’s roots in the Sephardic Jewish community that once thrived there.
Silvera has never been to Portugal nor does she intend to live there. But a Portuguese passport would assure her right to travel freely through the European Union.
• Poorly thought-out policies end up harming ordinary people. If there’s a hard Brexit, thousands of expats will see the lives they built end with the change of citizenship status.
There’s the Scottish mayor of a German community who’ll have to give up his post. There’s the German doctor practicing in Belfast whose uncertain post-Brexit status in the UK has him applying to practice in the Republic of Ireland.
And of course, there are the British farmers on the wrong side of the Irish border. They’ll instantly cut off from their markets in the Republic because post-Brexit, they’ll be required to take their products to new border inspection posts … at Dublin Airport, Dublin Port and Shannon Airport.
If you’re saying to yourself, “Wow, I never thought about any of that,” well neither did the “leaders” who thought up Brexit.
• A new 34-page document obtained by the Guardian shows that individual countries across Europe vary wildly when it comes to embracing their British expats post-Brexit. Especially if it’s a no-deal Brexit.
The most generous countries including Denmark, Norway, Cyprus, Austria, Slovakia, Italy, Bulgaria, Malta, Croatia and Romania will automatically reclassify British expats in place as legal, long-term residents after they lose their EU citizen status. At the other extreme is Germany, which appears to be offering only a 3-month transition period.
• One of the odder Brexit phenomena is the pro-Brexit expat. If you’re a member of any of the Facebook expat communities, you know there are a lot more of them than one might suppose. They extoll the virtues of Blighty and the innately superior qualities of Englishness, but don’t want to – you know – actually live in the United Kingdom. Or as one person posted on British Expats in Spain, “I didnt abandon my country i just decided to live in a different place.” (Spellings are correct.)
Many are far-right white supremacists who left the UK for countries they see as more homogeneous and monocultural.
This is from another Expat in Spain member (unedited):
I used to be proud to be British but unfortunately am now ashamed our country is a dumping ground for immigration, our once calm streets are overrun by violent gangs and Islamic law is knocking at our door, the benefit system is out of control and the NHS is overburdened, that why I am in Spain. White flight is real. Australia must protect herself from the mess our leftist government has created.
That “leftist government” the poster refered to was Prime Minister Theresa May’s Conservative Party. So, in the event of a hard Brexit and Rees-Mogg & Co. taking over, do they return to bask in the glory of a newly great Great Britain, or do they celebrate from afar? Or will they even have a choice if the EU and the UK come to a future showdown over immigration rules and freedom of travel?
• Brits working in the financial sector are pouring into Luxembourg as banks, hedge funds and investment houses leave London so they can continue doing business with the Continent in the event of a no-deal Brexit. But British employees at the European Union are finding themselves increasingly persona non grata – even those acquiring European citizenship to keep their positions, according to a Bloomberg post.
From the post:
“We are hearing that U.K. citizens who have changed nationality are being told informally that they will be regarded as British for promotion purposes, i.e. they will not be considered for further career advancement,” said Fiona Godfrey, co-chair of British in Europe, a coalition of British nationals in the EU.
By the way, the number of British citizens taking on dual nationality has more than quadrupled since 2015 to 435 people last year, according to Luxembourg government statistics. Apparently, the stain of Britishness endures at EU institutions … and the bitterness of divorce will linger long after the official termination of the union.
• As the Big Brexit Reality TV Show enters the “Anything Goes” segment, a new parliamentary report finds that Home Office legislation will strip 3 million EU citizens in the UK of their freedom of movement, housing and rights to social security even though they might have lived in Britain for years and paid into the British pension scheme.
The study by the Joint Committee on Human Rights found the May government’s proposed EU citizen registration plan post-Brexit does not provide physical proof of status. Labour MP Harriet Harman, who chairs the JCHR, noted the legislation would end the rights of people who have lived in the UK for years and might even have been born there.
• We’ve tended to fixate on the down-side of Brexit. But there is an upside. A lot of British expats have done pret-ty well for themselves and have the assets to indulge their fantasies – that chateau or beach house somewhere warm and sunny. True, an apartment in Geneva, Rome, Frankfurt or Paris is going to run you millions. But you can live in some fabulous places for very little money, relatively speaking. Or to put it delicately, about the same amount of money you’d spend on a dump in Hull.
Our American expat friend Lisa Verberne bought a huge house in a French village for a few thousand euros, then joined locals (including Brits) in creating a destination for creative types.
Financial Times has a post about expats discovering that Florence (Firenze) has it all … low taxes, inexpensive properties and less chaos and better services than Southern Italy. The post notes that in Italy as a whole, the average house price has collapsed 35 percent since 2011! (Here’s our post on the best destinations for expats and their families.)
CNN has a post about an entire island for sale off Sicily, on the market for the low, low prices of $1.1 million … the price for a cozy apartment Amsterdam.
Finally, expats can invest as little as 250,000 euros – a bargain fixer-upper here in the Netherlands – on a property in Portugal, Greece or Malta and get a residence visa in the bargain ... a visa that allows you to work and travel in Schengen. Or you could stay in Hull.
• A hard Brexit has already happened for many highly skilled internationals. Multiple sources say Brexit is driving top digital and tech talent to out of London, or dissuading them from ever considering the UK. Recently, an estimated 20 percent of tech workers came to the UK from EU countries. Now, Reuters has a new report that finds UK-based fintech companies are struggling to attract people with in-demand skills in coding, cloud computing, machine learning, software development, cyber, AI and blockchain.
The Financial Times quotes the heads of various business lobbies who are angry and panicky including Edwin Morgan of the Institute of Directors business, a lobby group. Morgan told FT his members are “fed up. They feel like they are watching multiple slow-motion car crashes again and again.”
An enduring mystery will be why the Tory Party, which claims to be pro-business, scorned CEOs’ deep skepticisms about Brexit. Or to quote one Boris Johnson, “F**k business.” (Okay, Boris used real letters, but you get the idea.)
• There’s a certain irony to Brexit in that so many Brits suddenly fancy themselves Irish.
A record 230,000 people have applied for Irish passports since the beginning of 2019, with 5,000 more expected to apply online just this weekend, according to Quartz. Most are citizens of the Republic of Ireland. BUT a large percentage of those applying are from Northern Ireland and the United Kingdom, doing whatever they can to maintain their freedom to work and travel in the European Union post-Brexit, one might conclude. You can check here to see if you’re eligible for a passport from the Republic of Ireland. The Republic – part of the EU – has seen an influx of jobs and capital fleeing the UK (see the following item). Which is great unless you’re trying to find affordable digs in Dublin.
Why is all this ironic? Well, the English and the Irish have been fighting at least since the War of the Roses in the 15th Century. What would be equally ironic? Brexit leads to a united Ireland.
• If Brexit has accomplished anything, it’s redistributing highly paid expats (particularly American bankers and hedge-fund executives) to other financial capitals from London.
A March report from the New Financial think tank indicates that 275 banking and financial firms have relocated so far. The big winner is Dublin, with 100 relocations. In second place is Luxembourg City with 60. Paris( 41), Frankfurt (40), and Amsterdam (32) trail far behind the capital of the Irish Republic, according to the report. So far, about 5,000 positions and almost 1 trillion pounds will leave London for the aforementioned cities.
“This is not Project Fear; this has already happened,” stated William Wright, the managing director of New Financial and one of the authors of the report. “It has been apparent to everyone in the City ever since the referendum that they needed to prepare for a hard Brexit,” he added.
While London is expected to remain the dominant financial center in Europe (soon to be out of Europe), Brexit is making Europe’s financial matrix far more multi-polar. And if you add the non-financial companies moving such as Sony and others, the numbers and job transfers are much higher, with Amsterdam the overall winner. (See below.)
• As we predicted early on, Brexit is driving up housing costs for expats across Europe. So, if you’re planning to run away to Paris, think again. Radio France International has a post about the trickle of wealthy French Brexit refugees returning to the capital driving up housing costs, especially for 1 million euro-plus homes. Earlier this year, the most expensive apartment ever sold in France – 39 million euros worth – went to a French gazillionaire returning from London.
• We love cosmic irony as much as the next person, but this rich. Farage & Co. sold Brexit to British voters as an instant return to greatness. Instead, it’s been EU countries that have benefitted as hundreds of companies, with thousands of jobs, have left the UK.
Here’s a pan-European snapshot:
Amsterdam officials are abandoning Dutch humility, bragging about how well they’re making out with Brexit. Amsterdam alone had record 153 foreign companies arrive in 2018, bringing 7,200 jobs with them, according to Politico and Dutch news releases. Half of the 4,000 jobs that will be created over the next three years are directly due to Brexit, according to city officials. And Rotterdam and Den Haag are also benefitting from Brexit. The only downside is, the Dutch aren’t sure where they’re going to put everyone. Big gets include Panasonic and Sony.
Dublin (see below)
Frankfurt is getting top executives from global financial giants UBS, Goldman Saches, JP Morgan and Morgan Stanley.
Luxembourg is getting part of the JP Morgan Chase operations.
Paris is getting Blackrock, Bank of America Merrill Lynch and parts of Credit Suisse.
This is just a partial list. A full list would require a book.
• If you’re looking for a place to flee what’s shaping up to be an ugly, ugly Brexit, then read this post on the Fortune website.
“In Brexit, could Dublin wear the crown?” reporter Richard Morgan has a long, long list of how the Republic of Ireland already is reaping the benefits of being like the United Kingdom, but not part of the United Kingdom. The fastest growing economy in the EU just keeps welcoming financial firms. Morgan writes that Ireland’s reputation for “calm and clarity” has turned it into an attractive destination for at least 12,000 British jobs, according to the City of London’s own estimates. And Dublin is a – if not THE – European digital destination for American tech giants and their well-paid employees.
• Russian entrepreneur Nickolay Storonsky has a warning for British officials … create fast-track visas for foreign tech talent, or risk falling behind the rest of the world in fintech. Storonsky is the founder of the digital bank Revolut.
“With all of the political uncertainty kicking off right now, lengthy immigration processes and bureaucracy will only slow down the UK fintech industry’s growth, and we risk losing out on the best talent to other EU countries such as Germany and France,” he’s quoted by City A.M. as saying.
That, of course, is counter to the core tenents of hardline Brexiteers, who want to block EU residents from moving to, and working in, the UK.
• Oh, the ignominy.
British citizens are about to join expats from Syria and Libya at the back of the line. Switzerland is instituting a quota system that will limit the number of Brits coming to work to 3,500. At first, we thought this was The Onion.
But we found the Swiss official statement which says (emphasis ours):
As part of its ‘Mind the Gap’ strategy, the Federal Council decided at its meeting on 13 February to introduce a separate quota as a temporary measure, allowing 3,500 British citizens to work in Switzerland. This is intended to mitigate the consequences for the economy and the cantons of an abrupt change in the status of British citizens from persons benefiting from freedom of movement to third-country nationals; it will also prevent undesirable competition for jobs between British citizens and other third-country nationals.
The good news is, the roughly 42,000 Brits already living in Switzerland get to stay. This just applies to new economic migrants wishing to come and work in the Alpine paradise. Switzerland isn’t an EU member but observes many of the EU rules and regulations. So if this is happening in Switzerland, then it could happen in other non-EU countries with large British expat populations.
• As we’ve posted earlier, the number of companies bailing on Britain is increasing. In February, Dutch officials acknowledged they have 250 companies in their sights.
About 42 companies representing 2,000 jobs already have moved to the Netherlands from the UK, according to this post in DW. Which is good news and bad if you’re an expat already living in, say, Amsterdam or Rotterdam. Yes, those companies are bringing new career opportunities. But housing prices and apartment rental rates in all the major Dutch cities already are through the roof, so you wonder where these people – mostly highly paid executives at HQs – are going to go.
If you use that same math, that’s an average of about 50 jobs per company, and let’s be honest … most are going to Amsterdam. So multiply that times 250 companies, and that’s 12,500 people. Which means basically adding the population of a small city to a large city. To a large, overcrowded city.
• That same DW post also has a section about Düsseldorf University Hospital running ads in Polish-language newspapers in London and other UK cities with the pitch, “Brexit worries; come to Germany.” Germany has a long-running acute shortage of nurses, and many Polish people already speak German and English
“Not only do we have the better pay, better social benefits and better working hours, we also have the better weather, the better food and the shorter way to Poland,” the ads read. This is getting cra-cra!
• A government memo predicts that between 50,000 to 250,000 British expats living in the EU could return home in the event of a no-deal Brexit. And these aren’t just any expats … these are pensioners who – the memo states – would put a lot of pressure on the UK’s healthcare system and other public services.
A “worst-case scenario” is that 150,000 return the first year, followed by a wave of 50,000. Government officials have told BuzzFeed the memo is outdated and they’re projecting 50,000 to return in the first year.
• Those expat pensioners will be hightailing it back to Blighty because the British government just notified them the Queen will no longer pay for their healthcare should the UK leave the EU without a deal.
From the notice:
For residents who use the S1 certificate, this may no longer be valid after 29 March 2019. The advice is to check what the latest healthcare arrangements are between the UK and the country British nationals currently live in.
• At the 60-day mark, it appeared that Germany and other countries would give British expats transition periods … but with one serious stipulation: They can’t leave.
When they register for the new registry title, they get back a reply (at right) that states that while they can stay in Germany, they can’t travel to other European countries or reenter Germany.
• Yes, Theresa May was probably bummed after her historic defeat on 15 January. But Frankfurt’s commercial real estate brokers are giddy. Brexit is boosting Frankfurt’s commercial real estate market to record heights as every major global financial giant relocates from London including Goldman Sachs, Citi, JPMorgan Chase and Barclays. The number of financial jobs at foreign-based banks in this city on the Main River is expected to increase to 8,000 from 2,000. Good news for our highly skilled internationals.
• Paris, Frankfurt Luxembourg City and Amsterdam are threatening London’s position as Europe’s money magnet. An EY study finds the amount of foreign capital headed for France has soared, with Paris beating London out of its top spot in terms of attractiveness to investors for the first time since the report began in 2003.
Frankfurt saw a total of 10.4 billion euros in commercial real estate transactions last year, an all-time high, up 36 percent from 2017, according to BNP Paribas Real Estate data.
Dublin is getting Hermes Investment Management, a $30-plus billion fund run by a former Fidelity executive, and Amsterdam is getting Norinchukin Bank, one of Japan’s largest. So, Brexit is an engine driving a dramatic redistribution of wealth to Europe’s other financial capitals.
• The question is, what will UK officials do for EU citizens???
In a move toward a quid pro quo, May sent an email to 100,000 EU citizens in October 2017 assuring those in the UK legally that they will be allowed to stay after Brexit, according to the Guardian. UK officials then registered an estimated 4 million EU residents in the UK. Post-Brexit, they will be required to have official identification numbers that will be used by employers, landlords, banks and public services, including hospitals.
All we keep hearing in our heads is, “Brexit means Brexit.” Apparently not.
• File this under, “Just when you thought it couldn’t get any worse.”
The Guardian has an in-depth look at how port authorities in Rotterdam – Europe’s largest, busiest port – are preparing to deal with a no-deal Brexit. And “Rotterdam prepared for worst when Britain crashes out of EU” might be the scariest Brexit post we’ve read so far … and that’s saying something.
For instance, at the stroke of midnight whenever Brexit happens, Rotterdam port workers will have to run checks on 10,500 newly “foreign” boats, according to the post. Those would be ships coming in from the UK. For every container ship that moves between the UK and the EU, there would be a whole new layer of documents and requirements for businesses on both sides of The Channel.
To prepare, the Port of Rotterdam is hiring 928 extra customs officials and 145 veterinary inspectors. The UK depends on just-in-time shipments of fresh food from the Netherlands. That will all end ….
• If you’re an expat in, say, Frankfurt or other financial centers, get ready for housing costs to skyrocket. Or settle for living in villages, towns, and cities within driving/train distance such as Darmstadt, Griesheim and Wiesbaden outside Frankfurt.
Multinational banks and financial houses based in London, focused as they are on objective economic forecasting, were the first to figure out Brexit isn’t going to end well. Greed, for lack of a better word, is apolitical. Unswayed by nationalism or emotion, they started planning on the first day for a worst-case scenario that would end “passporting” rights for cross-border money transfers and the arcane market transactions to happen without regulatory “friction.”
Top execs at large corporations – including those at British-based multinationals – are starting to doubt the UK can get a deal. If they decide to wait it out, a no-deal Brexit could conceivably cut their access to the world’s largest trading bloc while forcing them to scramble to find a new home at the last minute and spend millions of extra dollars/pounds/euros to do it.
So you can look forward to an unending series of announcements about these companies heading for the Continent.
This scenario will be repeated around Europe from Amsterdam to Paris as multinationals leave the UK to protect access to 500 million customers in the EU as opposed to 60 million in the UK.
So, Brexit pushing so many well-paid people into Frankfurt, Paris, Berlin, Amsterdam and Luxembourg will put pressure on housing markets in innovation centers, many of which already are seeing residential rents and sales skyrocket, not to mention the cost of office space.
• Conversely, finding a job in Europe could become much easier for non-EU talent from the United States, India, Mexico and other countries.
Britain has been, compared to Sweden, Germany and the Netherlands, a walled garden even though it has the No. 1 tech and startup scene in Europe. With banks, car manufacturers such as Ford and advanced manufacturing leaving the UK, expect an increase in opportunities in the EU, where highly skilled internationals are welcome. The downside is, this will put even more pressure on countries such as Sweden and Finland, where labor shortages are becoming critical.
• The British expats returning to the UK could look forward to empty shelves in stores.
Why? Because the UK imports twice as much food as it exports.
The irony, of course, is that you can almost swim from the coast of England to the Netherlands, which is the No. 2 food exporter in the world. How badly does the Netherlands need the UK? Try, not at all if that means tariffs. There are still 27 countries in the EU. And Britain still has to import food from somewhere.
• Brits are about to become poorer. Honda and other companies have long warned that if there’s a hard Brexit, they’re out of here. Several auto industry insiders warned the industry could go “extinct” after Brexit. Last April, British manufacturing had its worst month in five years while that most English of all car companies, Land Rover, announced plans to move some production to Slovakia. Worst of all, it appears EU rules dictate that when assembling vehicles, at least 55 percent of parts must come from inside the EU, which could mean suppliers in the UK would be cut out.
• To be fair, the United Kingdom has (had) the world’s fifth-largest economy, just behind Germany and one place ahead of France. The International Monetary Fund says that when the UK leaves the EU, there will be no winners. IMF analysts said that the EU could lose as much as 1.5 percent of gross domestic product from a “hard” Brexit while the UK would suffer an even bigger hit – a 4-percent loss of national income.
• Brexit was supposed to be about a more secure Britain. Turns out the opposite will happen. Leaving the EU means that British police will no longer have unrestricted access to the EU’s databases for crime fighting such as fingerprint or DNA archives. Nor will they have access to counter-terrorism data. Worse, E.U. law enforcement officials will scrub UK data and will require their British counterparts to scrub EU data, according to the Washington Post. Brexit also closes the door on some military cooperation and intelligence sharing. So it’s no surprise that Vladimir Putin is a huge Brexit fan.
Do we think all of this will happen? It depends.
Brexit is a divorce and divorces are always bitter. And despite what the Brexiteers claimed, the UK has very little leverage when it comes to competitive advantage. Other than finance and Rolls Royce jet engines, Britain doesn’t do anything – build cars like Germany, create ultra-high-tech like the Netherlands or excel in aircraft manufacturing like France – better than any other country.
If a new government came in, that might change the tenor of the talks with EU officials. Or it could even lead – best-case scenario – to the UK rethinking the wisdom of continuing down a road that leads straight over the White Cliffs of Dover.
But you have to wonder if the relationship between the UK and the EU can ever be repaired under any circumstances.