Growing concern in the City about Britain’s possible exit from the European Union has been underlined by the fact that the Wall Street firm Goldman Sachs had pumped a significant sum into the campaign for staying in.
The move on Wednesday by the high-profile US investment bank to back the in campaign – Britain Stronger in Europe – comes at a time when the City has started to focus on the possibility that the UK will vote to end its 43-year relationship with the EU.
Other City firms are known to be spending large sums of money considering the implications for their business of a possible Brexit, even though the date for a referendum has not yet been set.
David Cameron would like the referendum to be held in June to avoid the possibility of prolonged coverage of refugees fleeing to the EU. The news of the donation by Goldman Sachs to the in campaign – said to run to six figures – appeared to be carefully timed: Cameron is due to address delegates at the World Economic Forum in Davos, where a large delegation of UK business leaders and financiers have gathered for the annual event in the Swiss ski resort.
Senior officials from the bank – which earlier on Wednesday had reported full-year results hit by a $5bn (£3.5bn) settlement with the US authorities over a mortgage bond claims dating back to the financial crisis – have spoken out about the importance of the UK remaining in the union. The firm employs about 6,000 staff in London. It would not comment on the donation to the campaign, which is not classified as political donation as it is not party-specific.
Richard Gnodde, co-chief executive of Goldman Sachs International, the London-based arm of the bank, told a German newspaper last June that it was in everyone’s interest, and particularly the UK’s, that the country stay in theEU.
“Britain must remain part of a larger economic bloc. Anything else would damage the broader economy as well as the financial sector,” he said.
The topic is being debated on the sidelines of the Davos forum, which is also being attended by European leaders – although Germany’s chancellor, Angela Merkel, is notably absent this year.
Once the date of the referendum is set, the campaigning is expected to start in earnest and more business leaders may begin to speak out. Some are backing an exit although Sir Martin Sorrell, chief executive of the advertising company WPP, told Reuters that the in camp should run a campaign that highlighted the benefits of membership. “Keep it simple, make it as uncomplicated as possible, make it as visual as you can possibly can,” he told Reuters.
Dominic Barton, global managing director at McKinsey business consultancy, said some companies were planning for a UK exit. “I know one global bank that is spending $75m, because you’ve got to think about [your] real estate footprint, moving people, tax implications,” he said.
“And even though you don’t think it’s going to happen, as a leader you’ve got to have a backup plan,” Barton told Reuters.
This article was written by Jill Treanor and Larry Elliott in Davos, for theguardian.com on Wednesday 20th January 2016 20.30 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010