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05/12/2016

The cities fighting for London’s bankers after Brexit

The cities fighting for London’s bankers after Brexit

Wesrminster bridge, near Parliament. [ESB Professional/Shutterstock]

[ESB Professional/Shutterstock]

France’s Hauts-de-Seine department, west of Paris, has launched a poster campaign at London’s St Pancras railway station and Heathrow airport, in an effort to seduce the City’s bankers across the Channel. EurActiv’s partner La Tribune reports.

Pretenders to the EU’s financial services crown are lining up to poach London’s bankers. No sooner had the result of the 23 June British referendum been confirmed than the hopeful cities began rolling out the red carpet. The favourites to become the European Union’s leading financial hub after the UK pulls out are Frankfurt, Dublin and Paris.

Paris

The French capital and the department of Hauts-de-Seine, which is home to the financial centre La Défense, this week (17 October) launched an advertising campaign to attract British businesses. While the slogan “Tired of the fog? Try the Frogs”, may have baffled some, the campaign itself does a good job of explaining the merits of La Défense.

Strengths

La Défense is home to some 500 businesses, 40% of which are foreign. Of its 3.5 million m² of office space, 275,000m² are available immediately at rents three times lower than those in London. “Regrettable as the UK’s exit from the EU is, we have to be pragmatic and play to our strengths,” said Patrick Devedjian, the president of the Hauts-de-Seine departmental council.

Beyond the practicalities of Parisian infrastructure, the romantic image of the city, its beauty and way of life, will all surely be seductive prospects for potential expatriates.

Weaknesses

American financial newspaper Bloomberg is scathing in its criticism of Paris and the obstacles that stand between it and the prospect of becoming a financial powerhouse to rival London. The 35-hour working week is a drain on productivity, it is too difficult to fire people, taxes are too high… and the list goes on.

While it is hard to measure the real impact of these factors, it is clear that France’s image as a place to do business would need some work. Even a large-scale communications campaign may not be enough to convince the City’s bankers to up sticks to Paris.

And other cities with attractive qualities are also in the hunt for business.  According to Bloomberg, Frankfurt and Dublin are top of the list.

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Frankfurt

The German city, home to the European Central Bank, is Western Europe’s fourth largest financial centre, after London, Zurich and Luxembourg. So it is no surprise to see it among the contenders to succeed London once the UK leaves the EU. And the city’s leaders have no shortage of confidence. Hubertus Väth, the managing director of Frankfurt Main Finance, had launched a Twitter campaign and a website extolling the virtues of Frankfurt by 9AM on 24 June. “We think we will take the most jobs from London,” he told Bloomberg. Väth ambitiously predicts that  10,000 jobs could move from London to Frankfurt in the next five years.

Strengths

Germany’s fifth largest city has several attributes that could help it become the EU’s main financial centre: not only is it already considered a major financial hub, but it is situated in the EU’s biggest economy and most powerful country. More and more American and Asian investors are tempted by EU countries, and Frankfurt could position itself as the “safe” choice for those wanting to move their operations away from London.

Weaknesses

The main negatives raised by Bloomberg, aside from concerns over the high tax rate and restrictive labour laws, are the city’s size, which is tiny in comparison to London, and its “boring” provincial feel.

Dublin

Dublin may well have the best chance of the three. Just behind Paris in the European financial rankings, not only does it have the benefit of being a capital city, but its first language is English and it is geographically close to London.

Strengths

While its population is comparatively small at 1.8 million, Dublin is bigger than Frankfurt and could position itself as an attractive compromise between the metropolis and the provinces. Ireland is currently home to 500 international financial companies, which employ some 35,000 people. The country’s tax rates, which have already attracted the Internet giants Facebook and Google, among others, will certainly work in its favour. And Dublin’s quality of life and low residential rents are another major factor that may play in the city’s favour.

Weaknesses

On the other hand, Dublin’s business real estate is full and prices are rising. And the lack of people qualified to take top jobs could be another turnoff for companies hoping to set up shop in the Irish capital.

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