Business

UK should stay in EU, Goldman Sachs president says

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Media captionGary Cohn: "Having the UK be part Europe is the best thing for all of us"

The president of Goldman Sachs has said Britain should stay in the EU to ensure London remains a "great financial capital of the world".

Gary Cohn said financial firms "want to stay in London" - and Britain staying in the EU was the "best thing for all of us."

Some firms fear EU states could impose costs on UK-based banks to operate in the EU if Britain left the union.

But some business figures have called for Britain to pull out.

Mr Cohn said: "I think for the UK it's imperative to keep the financial services industry in London.

"We all want to stay in London - it is our European headquarters.

"I think that having a great financial capital of the world staying in the UK and having the UK be part Europe is the best thing for all of us."

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'Passporting'

BBC business editor Kamal Ahmed said the prospect of a referendum on Britain's EU membership if the Conservatives win May's general election had "raised fears that withdrawal could lead to many foreign banks moving their headquarters out of the UK".

He said this could be caused by the EU's use of "passporting rules" which could mean banks had to move their headquarters to EU countries or face higher costs.

Passporting allows financial firms to conduct business in any state within the European Economic Area under a series of single market directives - a right UK companies could lose if Britain exited.

Business leaders including the Confederation of British Industry and Virgin boss Sir Richard Branson have said Britain should stay in the EU.


Analysis: Kamal Ahmed, BBC Business Editor

Not all agree that the City's position would be adversely affected by not being in the EU.

In fact, without the need to follow all the EU regulations, Britain might become a more attractive place to do financial business. Look at Singapore, it is argued.

Mr Cohn is not so sure. If Britain isn't in the EU, what restrictions will be put in place for banks headquartered in London that need to do business in Europe?

Analysis: Banks fear restrictions


Goldman 'wrong'

However, reacting to Mr Cohn's comments, anti-EU lobby group Business for Britain said in a statement: "When Britain was debating whether to join the euro, Goldman Sachs threatened to pull out of the UK if we didn't and forecast the demise of the City and British financial services.

"They were wrong then, and they are wrong now".

The statement from the group continued: "The current position may suit the multi-millionaires at Goldman Sachs, but it holds back small and medium sized companies in the UK which are the main employers in our economy".

Inventor Sir James Dyson said in November that he would vote to leave the EU to avoid being "dominated and bullied by the Germans" - though he said he wanted to keep free trade and free movement of people.

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Lucy Thomas, campaign director of the pro-EU lobby group Business for New Europe, said: "Goldman Sachs is just one example of over 250 foreign banks based in London who rely on our EU membership. If they didn't have access to trade across the EU, they simply wouldn't stay here.

"Financial services account for 10% of the UK's tax take, half of which comes from international firms headquartered in London. Losing that would be hugely damaging to our economy."

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