Paris celebrates the arrival of the European Banking Authority

The Defense business district in Paris. [Kiev.Viktor/Shutterstock]

At the end of a suspenseful day, delegates from 27 EU governments meeting in the General Affairs Council chose to relocate the European Medicines Agency to Amsterdam and the European Banking Authority to Paris. EURACTIV France reports.

Martine Aubry, Mayor of Lille, reacted strongly, accusing the French government of not having done much to support the city’s bid for the European Medicines Agency. In fact, Lille had only one vote, that of France obviously.

“Despite (a) fantastic mobilisation” of health professionals, companies and elected officials of the Hauts-de-France, “we can only deplore the late and timid support shown by the president of the republic”, Martine Aubry (PS) and Xavier Bertrand, president of the region of Nord-Pas-de-Calais (LR), said in a joint statement.

On the other hand, the attractiveness of the Parisian market has been reinforced by the arrival of the European Banking Authority, which manages relations between banks in the eurozone and those outside the eurozone.

It’s a modest agency with only around 150 employees. But its symbolic significance is important for the financial institutions choosing where to relocate after Brexit. After the UK leaves the EU and the end of the European passport, the assets entrusted to EU banks outside the euro area will be reduced to only 7% of total EU assets.

The Elysee Palace gave Paris all attributes to make banks feel at ease. The elimination of the wealth tax from 2018 probably weighed in, as traders accustomed to significant bonuses are likely to be sensitive to the tax rate of their future home.

Three ministers have shared a joint statement, including Bruno Le Maire and Benjamin Griveaux [minister and vice-minister of finance] and Nathalie Loiseau, the minister in charge of European affairs.

“The measures taken by the government now make Paris one of the most attractive places in the world,” they said, highlighting an information service set up by Paris and the Ile-de- France region, called “Choose Paris Region”. It is trying to encourage more British institutions to come to Paris by highlighting an already flourishing sector with 145,000 people working there.

Green Finance

A few weeks before the One Planet Summit climate summit, which will be held on 12 December, Paris also wants to showcase its strengths in green finance.

The third financial capital of the world, behind New York and London, Paris hopes to become “the world capital of green finance”, as pointed out by the mayor, Anne Hidalgo. “It’s in Paris that the energy transition was invented, it’s in Paris that companies are innovative, in Paris, there are opportunities to contribute to the decarbonisation of finances and create sustainable jobs” added the mayor.

Luxembourg seeks to become Europe's green finance hub

At the COP23 summit in Bonn, Luxembourg’s finance and environment ministers joined with directors of the European Investment Bank to launch a de-risking mechanism that will allow financing of climate-friendly projects. 

For now, the test is far from being passed. Apart from a few green bond issues, Paris has missed the shift in carbon finance with the closure of its carbon exchange, Bluenext, rocked by a huge VAT fraud.

Paris Europlace, the lobby of the Parisian stock market, did not mention the subject at all in its own statement on Monday night.

“The Paris (stock) market, which occupies a leading position, intends to accelerate the construction of a more integrated and competitive financial Europe – a priority reinforced by the exit of the United Kingdom from the EU – in order to relaunch the financing of companies and favour growth,” said Gérard Mestrallet, president of Paris Europlace.

The lobby is also one of the few to downplay the role of the banking authority within the complex web of European financial institutions: it is only the third supervisory authority for banking structures after ESMA (European Securities and Market Authority), already established in Paris, Rue de Grenelle, and the European Insurance and Occupational Pensions Authority in Frankfurt.

Frankfurt, Paris ‘to get most Goldman Brexit jobs’

Frankfurt and Paris are expected to gain the most jobs from Goldman Sachs as it transfers staff out of London due to Brexit, a person familiar with the matter said Tuesday.