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What will European finance look like with(out) Britain?

31 January 2020: with Britain set to exit the EU, we speak to Despina Andreadou, Group Chief Audit Executive at Eurobank SA, about the future of finance in Europe without the UK.

Despina Andreadou vividly remembers working in the north-west of England in the late 1980s. As a freshly qualified chartered accountant for Ernst & Young, she regularly crisscrossed Manchester, Barnsley and Stockport for five years.

So how does the Greek Cypriot former LSE graduate think the European finance environment will change as the UK recedes from the scene? Much depends on trade agreements, she thinks. “Before we see that, it is not possible to tell if the changes will be significant or less significant.”

London’s influence as Europe’s main financial hub is inevitably under pressure. Other candidates have grown in relevance, Frankfurt being one example. A recent visit to Luxembourg in November 2019 was a shock for Andreadou. “I had not been to Luxembourg since 2009 or 2010,” she says. “The change has been phenomenal. It was a village and now it’s a financial centre."

The decision by the European Banking Authority (EBA) to shut its Canary Wharf office in June 2019 and re-open in Paris was also a significant move. While she calls the move “a big blow”, it was also unsurprising as the EBA could hardly remain in a country intent on quitting the Single Market.

Optimism overall

If Andreadou were an optimist – she makes clear she usually isn’t – she feels the EU financial community may reach more cohesion without the UK in the room. “It might glue better.”

More consensus on integration and a European Deposit Insurance Scheme – a major goal for European banking union – could also be on the table, plus a better chance to harmonise fiscal policies. “We have the Euro, but we do not have everything required to support the Euro. Without the UK, that will be easier.”

“On the other hand,” she expands, “the pessimist in me will say that looking at the leadership in Europe right now, I don’t feel that possibility is very high.”

Andreadou does not think Europe will be damaged in the medium- or long-term by Brexit. But her regret is unmissable and runs straight through the interview. “I want to be hopeful,” she says.

Justice for all

What one action would she implement immediately to improve her own country’s frail (though slowly improving) position? She doesn’t flinch. “The justice system. Many cases take decades to conclude. That makes it an unjust system.”

She is also frustrated with many people’s perception of Greece, often wrongly compared with  countries like Portugal, she says. “We are different. Some foreign investors get it wrong.”

Andreadou recalls being interviewed by a research company last summer. Was Greece prepared for the next financial crisis? “I started laughing. Guys, we are getting out of one just now. It took us a decade.”

Please note: the views expressed in this article are strictly personal and do not represent the view of Eurobank Greece in any way.