City with impeccable credentials – but corruption tag must be addressed
The saying “one man’s loss is another man’s gain” applies to the scramble going on among Europe’s financial elite as they try to pick off the potential 70,000 London City jobs post-Brexit.
If it is not carrying the analogy too far, Madrid appears to be the vulture that has arrived once the lions and hyenas have had their feed.
Spain is arguably the most Anglophile of all European nations and it took some time for the shock of Brexit to register. Unlike Paris, Frankfurt and Amsterdam, the Spaniards, who proudly wear Union Jacks plastered over shoes and clothing, could not believe the British had voted Leave.
The triggering of Article 50, the official EU divorce proceedings, has been a wake-up call for Madrid and it has realised the potential it has to lure companies across.
In the Cuatro Torres it has a readymade Canary Wharf replacement – plus an eager, skilled, inexpensive young workforce and excellent quality of life to attract the financial giants.
Spain must now have the confidence to understand that it could become a financial capital rivalling the big beasts of Europe.
As a lifestyle choice Madrid could not be further from the intense bustle of London. The salaries might not be astronomical, but at least workers can take things at a more relaxed pace. Instead of hurried sandwiches over the keyboard there are long lunches, little traffic congestion, heaps of culture and not much of a language barrier.
But Spain comes with a health warning. If banks, businesses and corporations are to feel confident in setting up shop then the country has to seriously consider law reforms in light of the Stepan Chernovetskyi case.
It appears that police decided that by dint of the fact he was Ukrainian and a multi-millionaire he must be crooked. They then embarked on an ill-advised raid – played out before the TV cameras – using officers armed with machine guns to arrest Mr Chernovetskyi at his family home. Worse still, footage on YouTube panned over luxury cars, jewellery and cash, leading viewers to an obvious conclusion.
The police compounded their error by locking up the entrepreneur for a month without charge under their out-of-date “secret summary procedure”. Such arbitrary behaviour smacks of the Franco dictatorship days that Spain has tried hard to bury in the past.
Mr Chernovetskyi makes the point that if Spain’s laws “allow this sort of thing to happen to a citizen then its laws clearly do not provide enough protection”. This could particularly apply post-Brexit to the 300,000 British
expats and those who join them.
Raise the subject of Madrid as a finance capital among those in London’s Square Mile and there are a few chortles followed by frequent reference to “corruption”. The latest scandal involves prosecutors being investigated for taking an unsanctioned 3 per cent cut off any corruption case they get to court. For example, in Mr Chernovetskyi’s case prosecutors will receive €300,000 (Dh1,2 million) if they succeed in proving the alleged €10m money laundering.
The corruption tag is something the Spanish government urgently needs to address, especially as it needs more entrepreneurs and SMEs to create jobs.
That aside, Spain is just one among 27 countries from which Britain will separate post-Brexit and it is already leading to difficulties. Interacting, a Madrid-based company which employs actors as trainers, is already looking to just take those with Irish rather than British passports because of residency issues.
“The Spaniards think Brexit is a dreadful mistake and that they are losing their best friend,” says Ed Cousins, a long-time Madrid resident.
“They really want the British to stand alongside them against the things that the Germans want.”