European Union plan could be a disaster for the world economy, warns expert

This may include ads from us and 3rd parties based on our understanding. Following the UK exit from the bloc, the EU has tried to shift firms away from London to the continent to give it more control over the financial market. Barnabas Reynolds warned that Brussels' plan could be a danger to the world economy due to the split between the power of the eurozone and sovereign states. Underlying the push is to be able to control and modify global financial regulatory standards to relieve market pressures on the highly fragile and dangerous euro project, according to Reynolds, global head of the Financial Services Industry Group for Shearman Sterling.

The idea is a reckless one and the consequences of such a approach, if the EU succeeds, could be calamitous for the world economy. According to The Daily Telegraph, Reynolds claimed that a member state doesn't have the power to force the European Central Bank ECB to print more money to cover debt. Under EU law, member states are responsible for fiscal purposes while the ECB governs monetary matters. Due to the friction, he claimed that certain financial liabilities within the bloc may be covered by an economically strong Germany, and therefore give a distorted perception of the market. The EU's plan to poach financial firms to the continent to change the global financial market is a danger to the world due to the split between a sovereign state and the European Central Bank. Barnabas Reynolds claimed that this friction could allow financial liabilities to be hidden within the bloc. He said that underlying the push is a wish to be able to control and modify global financial regulatory standards to relieve market pressures on the highly fragile and dangerous euro project. The idea is a reckless one and the consequences of such an approach, if the EU succeeds, could be calamitous for the world economy. He said that accounting treatments mean that liabilities that the markets assume are borne by wealthy members such as Germany fail to appear on the relevant balance sheet, giving a misleading picture of financial health. The cost of mutualising eurozone member state debts and creating a unitary state is too high, and it is clear that this will not happen soon. The cost of properly capitalising and applying international standards to the EU's financial system to reflect the risk arising from this setup would be prohibitively expensive.