The UK and the Eurozone After the Referendum
14 Pages Posted: 3 Jun 2016
Date Written: June 1, 2016
Public debate in the run up to the Referendum of 23 June has focused on many economic issues, including the status of the United Kingdom as a member state outside the Eurozone. Those campaigning to leave have argued that the government ‘has given away its veto’ over the further integration of the Eurozone for ‘little in return’. The government, on the other hand, claims that the new UK-EU settlement gives additional protection to the UK against potential discrimination. In this paper I discuss these claims on the basis of European Union law and the new UK/EU legal settlement. The discussion proceeds largely from first principles, since there is very little relevant case law. My conclusion is that a) the UK has not given up its veto over further Eurozone integration, b) the UK’s financial services industry will be far better protected against potential discrimination by the Eurozone if the UK stayed in the EU than if it left and c) the protection against discrimination is not an achievement of the renegotiation, but a standard feature of the treaties which has pre-existed the UK/EU settlement. The law of the single market, which binds all member states in the same way, envisages a clear prohibition against discrimination on the basis of nationality. Given that the creation and management of currency as legal tender is an aspect of the special dominion exercised by sovereign states, any discrimination on that ground will also constitute discrimination on the basis of nationality.
Keywords: Eurozone, European Union, Financial Services, Single Market
JEL Classification: K00, K22
Suggested Citation: Suggested Citation