EU’s blueprint for Frankfurt to clear out London jobs
BRUSSELS has developed a blueprint for creating a new, ‘very lucrative’ financial centre to replace London after Brexit, The Mail on Sunday has learned.
The study has been circulated by Deutsche Boerse, the Frankfurtbased operator of Germany’s stock exchange.
Frankfurt is seen as being in pole position to take over as the EU’s leading financial centre if London loses ground after Brexit.
The paper has emerged as the EU gears up for an overhaul – prompted by Brexit – of the ‘euroclearing’ market, which handles almost a trillion euros of transactions each day.
This is currently dominated by London and supports tens of thousands of jobs in Britain.
The paper – prepared by the European Parliament policy department – says that if the City is weakened by Brexit, there will be ‘a great opportunity’ for the EU to set up a rival financial centre ‘on the European mainland’.
It suggested that a ‘soft Brexit’ was the most desirable outcome for all, but that in any other scenario the EU could take advantage of any damage done to London.
It said: ‘This would entail relatively high relocation costs in the short run, but ... may turn out to be (very) lucrative in the long run.’
Moving ‘euro clearing’ would be key to setting up a new EU hub.
Without ‘clearing’ – the process of settling deals, previously done on paper but now through computers – banks and traders cannot keep track of their transactions.
Tomorrow is the last day of a separate European Commission consultation on proposals that could also pave the way for clearing to shift to Frankfurt on the River Main, or elsewhere in the EU.
Deutsche Boerse failed in a bid to merge with London Stock Exchange earlier this year. Its chief executive Carsten Kengeter stood down last week, over insider dealing allegations. He denies the claims.