Paris rolls out mea­sures for post-Brexit fi­nance

Kuwait Times - - BUSINESS -

French Prime Min­is­ter Edouard Philippe on Fri­day laid out a raft of mea­sures aimed at boost­ing Paris’s at­trac­tive­ness to high fi­nance to cash in on Bri­tain’s exit from the Euro­pean Union. Among them are scrap­ping a plan to widen a cur­rent 0.3 per­cent tax on fi­nan­cial trans­ac­tions, elim­i­nat­ing the top in­come tax bracket, and keep­ing bonuses out of the cal­cu­la­tion of sev­er­ance pay for “risk-tak­ers” such as stock­bro­kers.

“You can re­gret this (Brexit) de­ci­sion or wel­come it, but it’s a fact,” said Philippe, speak­ing on the roof of the Mon­naie de Paris-the na­tional mintwith the city’s glass-and-steel La De­fense fi­nan­cial district vis­i­ble in the dis­tance. “You have to deal with it.” Paris re­gional pres­i­dent Va­lerie Pe­cresse said, for her part: “To in­vestors, and to those dis­ap­pointed by Brexit, I want to say that we are ready to roll out the blue, white and red car­pet for you.”

Switch­ing to English, she added: “Wel­come back to Europe.” In an­other step aimed at at­tract­ing for­eign busi­nesses, the Paris area is to open three new in­ter­na­tional high schools by 2022 in ad­di­tion to the ex­ist­ing six. Philippe also an­nounced that work had be­gun to es­tab­lish an in­ter­na­tional tri­bunal in Paris to han­dle fi­nan­cial cases in English. Most in­ter­na­tional fi­nan­cial con­tracts are writ­ten in English and make ref­er­ence to Bri­tish law.

Also in the pipe­line is the “CDG Ex­press”, a rail line link­ing Charles de Gaulle air­port to the city. French Pres­i­dent Em­manuel Macron has pledged to re­lax France’s rigid la­bor laws to free its economy from red tape and ex­ces­sive tax­a­tion. The French fi­nan­cial sec­tor cur­rently rep­re­sents about 4.5 per­cent of na­tional out­put and em­ploys around 800,000 peo­ple.

Paris is com­pet­ing with Dublin, Frank­furt and other cen­ters for an ex­pected shift in fi­nance jobs out of Lon­don as a re­sult of Brexit. Sev­eral banks, es­pe­cially Asian in­sti­tu­tions, have re­cently an­nounced that they would move Euro­pean head­quar­ters from Lon­don to Frank­furt in re­sponse to Bri­tain’s de­par­ture from the EU. Bloomberg News re­ported Thurs­day that Deutsche Bank was mov­ing in­vest­ment bank­ing ac­tiv­i­ties from Lon­don to its Frank­furt head­quar­ters. So far Brexit has had a lim­ited im­pact in Paris, apart from bank­ing gi­ant HSBC’s de­ci­sion to re­lo­cate 1,000 em­ploy­ees from Lon­don to the French cap­i­tal. JP Mor­gan Chase, for its part, is mov­ing to Dublin, Frank­furt and Lux­em­bourg.

‘Not eas­ily repli­ca­ble’

“At this stage there are no com­mit­ments be­sides HSBC’s,” said ju­nior fi­nance min­is­ter Ben­jamin Griveaux. “We’re work­ing on it. To­day is an im­por­tant sig­nal to in­vestors.” With Bri­tain at risk of los­ing the “pass­port­ing rights” fi­nan­cial firms use to deal with clients in the rest of the bloc, em­ploy­ees in direct con­tact with cus­tomers may need to be based on EU ter­ri­tory in fu­ture.

Other jobs will need to move to deal with busi­ness that must be booked in the EU, as will risk man­age­ment work­ers, who must be based in the bloc to sat­isfy bank­ing su­per­vi­sors’ re­quire­ments. Re­act­ing to Philippe’s an­nounce­ment on Fri­day, Miles Celic, head of Bri­tain’s main fi­nan­cial lobby, TheCi­tyUK, said the Bri­tish fi­nan­cial sec­tor can­not be “quickly or eas­ily repli­ca­ble in other cen­tres”.


HAMBURG: French Pres­i­dent Em­manuel Macron (L) and Rus­sia’s Pres­i­dent Vladimir Putin shake hands dur­ing a bi­lat­eral meet­ing on the second day of the G20 sum­mit.

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