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Which city will become the financial capital of Europe instead of London after the UK withdraws from the European Union? At least three European cities are ready to compete for this status: Milan, Paris and Frankfurt am Main. Luxembourg, Amsterdam and Dublin are also mentioned in this context. Until recently, no one doubted the fact that Frankfurt has every chance of success. So far, Paris has not declared its aspirations. What are the arguments in favor of one and the other?
Frankfurt am Main
The financial capital of Germany, Frankfurt am Main, already houses headquarters of leading German banks and investment companies, the largest stock exchange of continental Europe, numerous offices and branches of foreign financial institutions. The city hosts headquarters of the European Central Bank (ECB), which is responsible for the euro's common currency, and the European office for the supervision of the insurance business Eiopa.
By now, Frankfurt has gathered the largest number of specific proposals from international banks, which, due to the withdrawal of the UK from the European Union, want to relocate part of their business from London to the continent. Non-European financial institutions will have to do this by April 1, 2019, because only within the EU do they become holders of the license that enables them to conduct business in a single European market.
The intentions of one of the largest German cities to become a European financial center are supported by many German politicians, including German Chancellor Angela Merkel. The other day she visited the Frankfurt Stock Exchange, where, in the presence of about 300 representatives of the financial sector and the banking sector, she expressed her hope that the financial institutions that decided to leave London would move to Frankfurt am Main after Brexit.
"We will do everything possible to support Hessen (the federal state where Frankfurt is located.) And create attractive framework conditions for Germany to become a financial center," Angela Merkel said.
The chancellor's speech is a clear signal from Berlin, which sounded at the most appropriate time: the European financial sector is in uncertainty because of the UK's withdrawal from the EU. No one knows how it will happen, and what rules will operate in the banking industry and finance after Brexit.
Once again, Merkel stressed that the course of the German government is aimed not at confrontation with London, but on mutual cooperation. At the same time, "it is important, of course, that this goal should be achieved under certain conditions: a country that is not a member of the EU cannot have the same rights and obligations as a member of the European Union," the chancellor said.
The main provisions governing Brexit should be defined already in the fall, according to Merkel. London should clarify details of withdrawal from the EU and formulate basic principles by which cooperation with the European Union will be carried out. This is important for the European economy as a whole, and especially for the investment climate. But due to the fact that there is complete clarity yet, the banks, for example, are delaying decision-making on the transfer of jobs from London. In addition, many of them are concerned about too stringent legislative restrictions existing in Germany, which provide a high level of protection of employees from dismissal.
Paris
And what about Paris? The French are interested in having their capital become a financial center of Europe no less than the Germans. President Emmanuel Macron, who has had a direct relationship to the banking sector in the past, is now openly working to ensure that the financial institutions that leave London after Brexit settle in Paris.
Valérie Pécresse, the president of the Ile de France Council, last year invited bankers and investors to the French capital, stressing that "they are happy in Europe, in the Paris region, and are ready to spread a red carpet before them, as it once was made in London."
The French capital already hosts the European Securities Market Supervision Authority (ESMA) and the headquarters of the leading French banks. According to the French Prime Minister Edouard Philippe, the French are ready to provide banks with special conditions, for example, to ease their tax burden.
The head of the French government points out other factors in favor of Paris, which can attract representatives of the banking and financial sector: "We know that the difference between the costs of banks to pay employees in comparison with other European cities with which we compete is very large," said the Prime Minister of France.
source: dw.de
Frankfurt am Main
The financial capital of Germany, Frankfurt am Main, already houses headquarters of leading German banks and investment companies, the largest stock exchange of continental Europe, numerous offices and branches of foreign financial institutions. The city hosts headquarters of the European Central Bank (ECB), which is responsible for the euro's common currency, and the European office for the supervision of the insurance business Eiopa.
By now, Frankfurt has gathered the largest number of specific proposals from international banks, which, due to the withdrawal of the UK from the European Union, want to relocate part of their business from London to the continent. Non-European financial institutions will have to do this by April 1, 2019, because only within the EU do they become holders of the license that enables them to conduct business in a single European market.
The intentions of one of the largest German cities to become a European financial center are supported by many German politicians, including German Chancellor Angela Merkel. The other day she visited the Frankfurt Stock Exchange, where, in the presence of about 300 representatives of the financial sector and the banking sector, she expressed her hope that the financial institutions that decided to leave London would move to Frankfurt am Main after Brexit.
"We will do everything possible to support Hessen (the federal state where Frankfurt is located.) And create attractive framework conditions for Germany to become a financial center," Angela Merkel said.
The chancellor's speech is a clear signal from Berlin, which sounded at the most appropriate time: the European financial sector is in uncertainty because of the UK's withdrawal from the EU. No one knows how it will happen, and what rules will operate in the banking industry and finance after Brexit.
Once again, Merkel stressed that the course of the German government is aimed not at confrontation with London, but on mutual cooperation. At the same time, "it is important, of course, that this goal should be achieved under certain conditions: a country that is not a member of the EU cannot have the same rights and obligations as a member of the European Union," the chancellor said.
The main provisions governing Brexit should be defined already in the fall, according to Merkel. London should clarify details of withdrawal from the EU and formulate basic principles by which cooperation with the European Union will be carried out. This is important for the European economy as a whole, and especially for the investment climate. But due to the fact that there is complete clarity yet, the banks, for example, are delaying decision-making on the transfer of jobs from London. In addition, many of them are concerned about too stringent legislative restrictions existing in Germany, which provide a high level of protection of employees from dismissal.
Paris
And what about Paris? The French are interested in having their capital become a financial center of Europe no less than the Germans. President Emmanuel Macron, who has had a direct relationship to the banking sector in the past, is now openly working to ensure that the financial institutions that leave London after Brexit settle in Paris.
Valérie Pécresse, the president of the Ile de France Council, last year invited bankers and investors to the French capital, stressing that "they are happy in Europe, in the Paris region, and are ready to spread a red carpet before them, as it once was made in London."
The French capital already hosts the European Securities Market Supervision Authority (ESMA) and the headquarters of the leading French banks. According to the French Prime Minister Edouard Philippe, the French are ready to provide banks with special conditions, for example, to ease their tax burden.
The head of the French government points out other factors in favor of Paris, which can attract representatives of the banking and financial sector: "We know that the difference between the costs of banks to pay employees in comparison with other European cities with which we compete is very large," said the Prime Minister of France.
source: dw.de
