Report
Patrick Artus

Why can there be Brexit and not "Frexit"?

What is it about the United Kingdom that allowed it to leave the European Union and why does the consensus believe this is impossible for France? The United Kingdom had retained its monetary independence; the low level of interest rates in the United Kingdom did not depend, as is the case with France, on the central bank’s commitment to stabilise yield spreads; The United Kingdom's gross external debt was already in the local currency, whereas that of France is in euros, hence the risk of a massive increase in this debt in local currency left the EU; In a related manner, the pound sterling is an important reserve currency, which would not be the case for the French franc; The London financial centre has suffered little from leaving the EU, which would not be the case for Paris; The substitution of exports to the rest of the world for exports to Europe would be even more difficult for France than for the United Kingdom.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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