Chancellor George Osborne has shown his support for the proposed merger of the London Stock Exchange and Deutsche Boerse.
The £21bn "merger of equals" deal between the UK and German stock exchanges was agreed in March and the companies hope for completion by the end of this year or in the first quarter of 2017.
Analysts are far from certain the deal will complete – with Exane BNP Paribas giving it more than a 50 per cent chance of being blocked – and political opposition is one of the many “hurdles” it is facing.
John Mann and Mark Garnier, MPs on the Treasury Committee, have called for the deal to come under their scrutiny. And politicians in Germany have made their opposition to the deal clear.
Appearing before the Treasury Committee today to talk about the EU referendum, Osborne was asked whether he had any concerns about the deal.
Garnier said: “A number of my constituents have come to me and said they’re slightly worried that quote-unquote the Germans are taking over the City of London. There hasn’t really been much comment from the government about this. Are you concerned that this is 1944 by stealth?”
Osborne responded: “No, I am not. And I think one of the remarkable things about the UK and its membership of the European Union is that we have benefited enormously from the single market in financial services."
He added: "I think [the London Stock Exchange and Deutsche Boerse have] said that the Topco would be located in the UK. So I think Britain’s strength has always been as a centre of European as well as global finance.
"And we trade as many Euros through London as they do on the continent every day. So we benefit enormously and there are lots of German, French and other businesses that base themselves in London.”