What are the implications of the UK’s Brexit referendum?

With the result of the forthcoming UK referendum on EU membership now too close to call, we interview SEB’s UK Head Roger Gifford to a look at the implications of the result and the impact on Anglo-Swedish relations. 

It isn't just UK citizens who are looking closely at the opinion polls as the nation votes on EU membership on 23rd June. As the 'Leave' campaign enjoys a slender lead for the very first time in this week's polls, SEB's UK Head Roger Gifford believes that the UK result will be scrutinised across the continent. "I think there is a real chance that separatist groups in other major EU nations would see a UK exit as a political plus," he observes.

"There are already strong anti-EU voices in France, Holland, Germany, Sweden and Finland and a 'Leave' vote in the UK could act as a catalyst for greater independence elsewhere. In many ways, a 'Leave' vote would raise some central questions about the future direction of the EU. Having said this, the breakup of the whole EU structure is hard to see as it has been so successful in so many areas since the Second World War," he says.

Since campaigning on the issue officially began on the 15th April, Brexit (an abbreviation of British exit) has received blanket media coverage. Whilst the 'Remain' campaign enjoyed a strong lead at the beginning of the campaign, this appears to have been eroded and the result cannot be called with any certainty, though a clear and decisive win (by 5 percentage points of more) to Leave currently seems unlikely.

Two issues have dominated the campaign – the economy and immigration and Roger Gifford believes that as the UK prepares to go to the polls the economic argument has been won. "I think it is now widely accepted – even by those who wish to leave the EU – that financially the UK is stronger as a result of membership. If the UK does decide it wants to come out of the EU, it will be because of other issues such as immigration or sovereignty."

But Roger does not underplay the consequences that a vote to leave would have for the UK, particularly for the financial services sector. "A 'Leave' vote would see Paris, Frankfurt and Luxembourg all extremely keen to compete for the title of 'financial capital of Europe', which is likely to lead to greater barriers for London and a lower attraction of London as a result. I think in trade terms, it would also cause the UK some medium-term challenges. Of course, the UK is an important trading partner for all European countries so a trade deal would undoubtedly be done eventually and it would put the UK in the Norway or Switzerland category, probably in the European Free Trade Association (EFTA) or the European Economic Area (EEA)," he adds.

Of course, the British Government has some room for manoeuvre, even if it loses a close vote as there are good reasons to assume that both London and Brussels would be prepared to reassess the UK-EU agreement one more time. This would open the door for a new referendum. Other EU member countries such as France, the Netherlands, Ireland and Denmark have been given the opportunity to vote more than once in referendums.

Whatever the outcome and the political fallout, Roger is certain of one thing, which is the continuation of a strong relationship with Sweden. "If the UK did leave the EU, it would leave Sweden without an important ally within the European political framework, but we would always be a strong ally in other areas. I do not really see Anglo-Swedish business relations being affected. Any departure of the UK from the EU would take many years to arrange, so there is unlikely to be an immediate impact. After a lengthy negotiation period I think the ties would remain strong but on a different footing, for example through WTA, or EEA/EFTA and bilaterally - and this is likely to mean less easy trading and some disruption while things are sorted out."