There are four ‘free movements’ (also called freedoms) that are intrinsic and indivisible with regard to the EU. These are the free movement of: Trade, Capital, People and Services. They are collectively the core of the Union.
The UK does not want to retain free movement, but does want to retain the other three. Many have stated that this is simply not a realistic option; but we live in the real world and rarely is everything ruled out as an absolute. So on a “quid pro quo” basis there is an option, and a very nice one available to the EU. They simply agree. They also state that as far as the UK is concerned the EU also get to select one of the freedoms to be removed from the UK; but which one?
They can unilaterally retain Free Movement from the UK. All those UK citizens who wish to live, work, pay taxes, spend and contribute to another member state remain free to do so. This may drain the UK of the best, the brightest, and the young, but that is a benefit to the EU.
They can retain Free Trade; after all the UK buys more than it sells to the EU, so a real benefit to the Union. The EU can buy from anywhere, so their exports issue only relate to goods that cannot be sourced from elsewhere in the Union.
Retaining the free movement of Capital also makes sense as more UK companies have operations on the continent than vice versa (3:1 against the UK); therefore capital moved from the UK to the EU is a real benefit.
So that leaves Services. Now services as they relate to the EU comprise some 18.2 per cent of the UK GDP. If this freedom was selected to offset the freedom of movement, then a considerable proportion of that income would be transferred to Frankfurt or elsewhere on the continent. The overt competition to EU financial institutions from a powerful UK financial sector would be negated at a stroke. Passporting of UK services would end, and this would lead to considerable EU growth within that area. An added benefit is that the global experts in the field are currently located in London. Given a unilateral declaration to retain free movement, irrespective of the UK national position, a large proportion of these people will ‘follow the money’.
Simplistic some would say. Yes, indeed it is, but when we are talking about a negotiation between the UK and the remaining 27 the acronym KISS springs to mind (Keep It Simple, Stupid).