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Mortgage industry faces EU marginalisation

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The British mortgage industry could be marginalised by a more integrated Eurozone, a European Union expert has warned.

London School of Economics’ European Politics professor Simon Hix was taking part in a debate on the future of the EU at the union’s London headquarters, where he argued the Eurozone crisis would lead to further integration of Eurozone countries.

He told Your Mortgage the EU mortgage directive was exactly the kind of legislation which would be “stitched up” by countries within the Eurozone: “We are already seeing this with financial transactions tax and the salaries of bankers. Britain was marginalised on that question.

“For a long time Britain was a leader on the financial services question. We are really seeing that change.”

Britain was likely to find itself in a minority of one or two countries in its position on financial services reforms, he suggested, and called for a “new relationship” which protected its interests in the single market.

Alliance of Liberal and Democrats in Europe leader Guy Verhofstadt, who is also the former prime minister of Belgium, joined Hix in predicting deeper integration as a result of the crisis.

However, he argued this was the solution to its economic problems: “It is impossible to have a currency union without having a banking union.

“Behind the Euro there is only the European Central Bank. There are no common policies, no common bond market, no common Treasury.”

Shadow Europe minister Emma Reynolds acknowledged the Eurozone was moving towards a banking union but suggested further integration was unlikely. “The idea that the Eurozone is going to integrate and leave the rest of the EU behind is fanciful,” she said.

The EU mortgage directive was agreed in April 2013 as a framework governing mortgage industries within the European Union.

The UK will have a number of exemptions from the scheme including shared equity, buy-to-let and the Lloyds Lend a Hand products.

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