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Wall Street weighs into Britain's EU referendum - Goldman, JPMorgan back 'in' campaign
January 21, 2016 / 1:24 PM / 2 years ago

Wall Street weighs into Britain's EU referendum - Goldman, JPMorgan back 'in' campaign

A European Union flag and the United Kingdom's Union flag fly outside Europe House, the office of the European Commission in London, Britain January 20, 2016. REUTERS/Stefan Wermuth

LONDON (Reuters) - Goldman Sachs and JPMorgan are making large donations to the campaign to keep Britain inside the European Union, sources said, highlighting the concern among some of the world’s biggest banks over the impact of a British exit.

Goldman Sachs (GS.N) has agreed to donate a “substantial six-figure sum” according to one source, while JPMorgan (JPM.N) was preparing to make a similar donation, another source familiar with the matter said.

In the face of growing Euroscepticism among the British electorate and political pressure from within his own party, Prime Minister David Cameron has promised to hold a referendum on Britain’s EU membership by the end of 2017.

On Thursday, Cameron was preparing to urge business leaders at the World Economic Forum in the Swiss resort of Davos to speak up in favour of Britain staying in a reformed EU.

Cameron is hoping to head off the threat of a British exit, or ‘Brexit’, by negotiating a package of reforms to the bloc that address concerns about immigration, sovereignty and competitiveness.

He received some support on Thursday from French President Francois Hollande, who said none of Britain’s EU reform demands were “insurmountable”, but that they must not prevent the euro zone from pursuing further integration.

But with British public opinion finely balanced and renegotiations with Cameron’s EU peers meeting resistance, multinational businesses in Britain are facing up to the risk that the vote could sever links with the country’s biggest trading partner.

A spokesman for pro-EU group Britain Stronger in Europe, the expected recipient of the donations, said it had a broad range of backers: “This includes many small donors, philanthropists and businesses worried by job losses and price rises if we were to leave.”

The Goldman Sachs logo is displayed on a post above the floor of the New York Stock Exchange, September 11, 2013. REUTERS/Lucas Jackson

Until a date for the referendum is set, campaigns on both sides can accept and spend donations without restriction. However they may be required to declare details of prior donors once the government sets a referendum date. Spending will be capped during the period immediately before the referendum.

“THE ESTABLISHMENT”

People walk inside JP Morgan headquarters in New York, October 25, 2013. REUTERS/Eduardo Munoz

The donations were dismissed as “no surprise” by Leave.EU, one of several pro-Brexit campaigns, which says the EU works against ordinary Britons and protects vested political and commercial interests.

“The referendum will be a campaign of the British people against the establishment of international bankers, multinational corporate tax dodgers and out-of-touch politicians,” said Arron Banks, the group’s co-founder.

Arch-Eurosceptic Nigel Farage, leader of the UK Independence Party whose popularity put pressure on Cameron to make the offer of a referendum, described the donations as “the unholy alliance of big banks and big politics.”

Cameron, however, is keen to enlist the support of businesses to help his reform agenda clear political hurdles in other European capitals, and to illustrate the damage that he believes leaving the bloc would do to the country’s economy.

“If you believe like I do that Britain is better off in a reformed European Union ... then when the time comes, help me make that case for Britain to stay,” he will say in Davos later on Thursday.

“This is a once in a generation moment - and the stakes are high.”

Additional reporting by Elizabeth Piper in Davos, Kylie MacLellan in London, Writing by William James; Editing by Guy Faulconbridge and Hugh Lawson

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