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By Jenny Anderson

LONDON: Tremors over a possible breakup of the United Kingdom have been felt here in recent days, as markets gyrate and banks make contingency plans.

Yet as Scotland nears its vote on whether to be an independent nation, bankers here worry that a split might unintentionally set in motion a push for what could be a much uglier divorce: an exit of Britain from the European Union.

"There's a sense of, 'If it could happen in Scotland, it could it happen in the UK,'" said Chris Cummings, chief executive of TheCityUK, a lobbying group for the financial sector.

If an independent Scotland would be complicated, a Britain alone in Europe would be a complete mess, financial executives say.

"Certainly the more important of the two is the potential of Britain leaving the EU," said Brian Hilliard, the chief British economist at Societe Generale in London.

Britain, for many businesses, particularly financial services, is a gateway into the rest of the 28-nation European Union, a market of 500 million people, more than the United States and Japan combined. For businesses like Citigroup or Goldman Sachs, having a London office means having a passport for nearly all of Europe. Without that unfettered access, the free flow of capital, talent, and goods and services would have to be renegotiated.

"It is hard to be the gateway to the EU if you are not in the EU," Cummings said.

A diminished gateway status would hurt the financial industry, which accounts for 7 percent of Britain's gross domestic product and nearly 4 percent of jobs. Finance attracts more foreign direct investment than any other sector, and Britain attracts more foreign direct investment than any other member of the EU, according to TheCityUK.

Bankers worry that without the promise of all of Europe behind it, London - rivaled only by New York as the world's leading financial center - would not attract the same interest, and neither would Britain.

See original here:
If Scoltand goes, will Britain exit European Union too?