Italy and Spain lead the fight to conquer UK-based EU agencies

Italian Prime Minister Matteo Renzi (in the picture) and his Spanish counterpart, Mariano Rajoy, set up task forces to bolster their bids. [European Council]

In the aftermath of the Brexit vote, Rome and Madrid are leading the race to gain the right to host influential EU agencies, while Croatia, Bulgaria, Cyprus, Romania and Slovakia could remain empty-handed.

The slow-motion EU break-up triggered by the UK referendum held on 23 June shocked financial markets across Europe, weakened struggling banks in countries like Italy and alerted eurocrats to the political risks of being too strict when EU rules are breached in times of social unrest. Spain and Portugal’s budgetary slippages are prime examples.

But Britain’s exit from the European club also brings precious opportunities for others, as the country will have to get rid of its EU agencies: the European Banking Authority (EBA) and the European Medicines Agency (EMA), both based in London.

Both are among the most influential EU agencies. They play a major role in regulating two of the most profitable sectors and they are popular targets for lobbyists and companies.

As the EU and the UK begin to prepare their divorce negotiations, few member states thrown their hat into the ring to fight for the two agencies.

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Italy and Spain have been not only the most vocal about their intentions to bring the EBA and EMA headquarters to their territory, but have also set up special groups to start preparing their candidacies.

Italian Prime Minister Matteo Renzi has created a task force to make his case, Italian media reported. In parallel, the major of Milan, Giuseppe Sala, travelled to London on 6 July to promote its city as the perfect candidate to host both agencies “thanks to its excellent infrastructure, ten universities, investments aiming to further bolster the post-Expo area and a real estate market which is in full recovery”, he told reporters .

As part of his visit, Sala met with the chair of the EBA, Andrea Enria, in order to better prepare his bid.

Madrid supports Barcelona

In Spain, the campaign has brought Madrid and Barcelona together, after months of bitter dispute between the national and regional governments caused by Catalonia’s secessionist efforts.

Spain’s Deputy Prime-Minister Soraya Saez de Santa María said on Thursday (28 July) that the central government will work “closely and in coordination” with the Catalonian government to “fight for Barcelona as the seat of EMA”.

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She recalled that the city became second when London was elected to host the EU drugs agency. In order to strengthen the Spanish candidacy this time, she announced that the Ministry of Health is preparing to publish a report backing Barcelona’s bid.

As for the EBA, Spain is promoting Madrid as the ideal place to relocate the agency.

Waiting for an office

But EU sources underlined that Spain and Italy already host numerous agencies, while five member states (Croatia, Bulgaria, Cyprus, Romania and Slovakia) have none.

Spain has three agencies: the EU Intellectual Property Office (EUIPO) in Alicante, the European Agency for Safety and Health at Work (EU-OSHA) in Bilbao and the European Fisheries Control Agency (EFCA), in Vigo. It also hosts EU centres like the EU satellite Centre (Satcen) in Madrid, Fusion for Energy in Barcelona and a Joint Research Centre in Seville.

Italy hosts the European Food Safety Authority (EFSA) in Parma, the European Training Foundation (ETF) in Turin and a Joint Research Centre in Ispra.

Officials in the Commission, the Council, the EBA and EMA declined to comment on the record on the relocation process, as the issue will not be formally discussed until Britain triggers Article 50 to negotiate its exit from the Union.

However, insiders in the agencies noted off the record that there are other factors that would play an important role in the decision besides the absence of an EU agency.

In the case of EMA, good transport connections and other logistical factors will be crucial, given that around 210 experts grouped in seven scientific committees have to travel every month to London for their meetings. In total, 3,600 experts regularly visit the agency, which counts  890 permanent employees.

For EBA chair Enria, logic dictates that the agency’s 159 employees should be close to a big financial centre. This is why Milan and Madrid are not the only cities on the agency’s radar, but are joined by Amsterdm.

In an interview with CNBC on 28 July, Enria urged the Council, the Parliament and the Commission to decide on the new seat of the agency “as quickly as possible” in order to give certainty to the staff. Otherwise, this interim period could “impact” on new recruitments or on the ability of the agency to retain its personnel.

The decision to relocate the EBA could be taken as part of the Brexit talks, once Article 50 is activated, or as part of the review of its regulation, which takes place every three years, and where the three institutions would play a role.

The last review took place in late 2015.

EU officials noted that the final say is in the member states’ hands. Article 341 of the treaties stipulates that “The seat of the institutions of the Union shall be determined by common accord of the governments of the member states.”

Meanwhile, other voices warned of the damage that could be caused to the agencies once they are relocated.

Richard Bergström, head of the European Federation of Pharmaceutical Industries and Associations, said that the process of moving the EMA would be “very messy”. In his view, its expertise would be damaged as “huge numbers” of people with deep institutional knowledge might quit the agency, putting at risk the quality of its regulatory work.

  • European Banking Authority website
  • European Medicines Agency website

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