Image © IRStone, Adobe Stock
- Second referendum reasonable given greater clarity
- Irish border can be both hard and undefended
- Brexit a lose-lose for both the City and continent
A second referendum is justifiable on the basis that Brexit was not a clearly-defined proposition when people voted on it in June 2016, says Jean Raby CEO of Natixis Investment Managers.
Raby's view on the merits of a second referendum comes in the wake of the failure of the UK government to pass their Brexit deal negotiated with the EU through parliament on Tuesday, March 12.
“What I do see when I look at Brexit and I step back, is that the assertion that going back to the people is undemocratic, is wrong, and that, in fact, given the ill-defined contours of what Brexit meant at the time of the referendum in 2016, would justify going back to the people whichever deal you put on the table,” says Raby, speaking to Bloomberg News.
Despite technical problems around how to structure the referendum questions itself, Raby sees another vote as being a credible option to move the UK forward.
“Now the question may not be easy to ask, and it may be a three-part type question, but I continue to believe that the democratic thing to do, would be, if needed to go back to the people.”
Based on current polling, a second referendum would probably deliver a verdict to remain in the EU, according to most recent polls on the subject.
It is worth reminding readers at this point that polling ahead of the 2016 EU referendum consistently saw 'remain' polling ahead of 'leave' and polls do not reveal a significant sea-change against leaving the EU that might prompt a stronger argument in favour of another vote.
Irish Border is Solvable
Even if a second referendum is not called, Raby sees a ‘no-deal’ Brexit as the least likely end-result for the UK.
“I continue to believe that the outcome at the end of the road will be more likely ‘soft Brexit’ or ‘no Brexit’ at all than a ‘no-deal’ Brexit.”
Concerning the stumbling block that keep's tripping over the current EU-UK Brexit deal, Raby does not think the Irish border issue is insoluble either. He says there are many 'soft' borders around the world which the British could emulate when it comes to defining its border with the EU.
“When I look at the lynchpin issue of the Irish border backstop, one looks at experiences around the world, and I know it is not politically correct for me to say, but when you look at the largest trading relationship in the world, between U.S. and Canada, it’s a hard border but an undefended border - communities are split sometimes - but nevertheless, that relationship is thriving. Even though you have seen the gyrations around the free-trade agreement in north America, so I would like to believe that all of these elements can be put together at some point,” says Raby.
In relation to the question of how Brexit will impact Natixis' presence in the City of London, it is 'quasi-business-as-usual':
“We have a presence in the UK,” says Raby. “That presence will remain because we continue to believe that the UK, whatever the scenarios, will remain a very important asset management market, and, therefore, we are making some adjustments, from a regulatory perspective, and with some of our affiliates based in the UK also opening up operations in continental Europe. But I would say, right now for us, it's not necessarily business as usual, but quasi business as usual because the adjustments are minor.”
Yet despite Natixis not being impacted much there has still been an impact on other businesses in the financial sector with some flows out to Continental Europe.
“We are not in a time warp, and I know some of our peers have significant numbers of people to continental Europe,” says the Natixis CEO.
The situation is less than ideal. Despite moves to Europe both sides of the channel stand to lose, says Raby who sees the overall effect of Brexit as causing a lose-lose for both the UK and Europe.
“One thing that I regret in the Brexit debate since 2016, has been that the public narrative has been very much, how many jobs can continental Europe take away from London. And that this has benefited Paris, and that it has benefited Frankfurt, but I would have liked the narrative to be much more about, what can we do in continental Europe to ensure that the political space opens, develops or accelerates in the UK, to allow for this decision to be rescinded,” says Raby. “Because for me it is a lose-lose. Not a win-lose, and when we think about finance jobs we have a tendency to think it is win continental Europe; lose UK, but from my perspective, it is a lose-lose for both sides.”