May 19, 2024
‘Like cracked nuclear reactor’ EU must accept UK rules or face eurozone meltdown – expert
Michel Barnier must be warned the eurozone is like a 'cracked nuclear reactor', said Barney Reynolds
Michel Barnier must be warned the eurozone is like a ‘cracked nuclear reactor’, said Barney Reynolds

THE eurozone is teetering on the brink of a calamitous meltdown and needs the UK’s financial discipline to pull it back from the abyss, a legal expert has warned.

Barney Reynolds, a leading UK and international financial services lawyer and a partner at Shearman and Sterling LLP, made his dramatic prediction days after the publication of a new paper in which he sets out precisely what risk the eurozone is running – a risk which threatens to engulf the world in a fiscal “contagion” quite separate from the ongoing coronavirus – which he said was exacerbating things still further. The eurozone, officially known as the euro area, which was established in January 1, 1999, is a monetary union consisting of 19 of the 27 EU member states, all of which have adopted the euro as their currency. The UK opted not to join, instead retaining the pound. Brexiteer Mr Reynolds, who co-authored the paper, Managing Euro Risk, with David Blake and Robert Lyddon, told Britain’s departure from the EU posed a specific risk because the bloc was pushing for the UK to adopt EU rules with respect to financial services, with London-based businesses transferred to the EU’s management.

He said: “The nub of it is that the eurozone states are running a currency system which is half-finished with the result that it is extremely risky.

“And that risk is not being run principally by them since the set-up offloads it – it defaults to the rest of the world.

“So our pensions and investments are running that risk.

“Apart from the fact that right now the Bank of England mitigates that risk.

“So the Bank of England stands as protector to the global market from that risk because we host the market here.:


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