Osborne: London will always be Europe’s financial hub

The City of London

The City of London

UK Chancellor of the Exchequer George Osborne warned today (6 January) against talk of competition between London, Paris and Frankfurt in financial services, insisting that London is Europe's financial services centre and competes only with Asia and America.

In an op-ed for the Financial Times entitled 'Europe must start putting its house in order', Osborne takes stock of the start of the French Presidency of G20 and today's meeting of the leaders of the major advanced and emerging economies in Paris.

Talk of competition between London, Paris and Frankfurt misses the point. It is the relative competitiveness of Europe, with London as its major financial hub, against other centres in Asia and America that is the real issue. No-one should doubt that Britain is determined to remain a global financial centre serving Europe and the world, Osborne writes.

Although the UK is not a member of the euro and has no intention of joining the euro zone, Osborne's article seems like a plea for better coordination and a stronger euro.

The euro zone must follow the logic of the single currency and stand more convincingly behind the euro. Action at European level must be matched by difficult domestic decisions, Osborne writes.

He cites his country's deficit reduction plan, which brought affirmation of the UK's triple A credit rating.

However, it seems that his call for the euro zone to get its act together should by no means be interpreted as a declaration by London that it stands ready to provide help. At an EU summit on 17 December, UK Prime Minister David Cameron secured other EU countries' agreement that London will not contribute to future bailouts, such as those in favour of Greece and Ireland.

Osborne's article could be seen as a wish-list for the French Presidencies of the G8 and G20, which began on 1 January.

French President Nicolas Sarkozy hopes his new international role will boost dismal approval ratings at home. Sarkozy's image benefited greatly from the French EU Presidency in the second half of 2008, when he helped troubleshoot the Georgia crisis and organise Europe's response to the global financial crisis.

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