France experiences financial optimism
President tries to lure businesses post-brexit
PARIS— Banking giant Citigroup, fast-food company KFC and elevator-maker Otis are planning to expand activities in France thanks in part to what they call the “Macron effect” — a surge in investor optimism driven by the French president’s pro-business promises.
But will they move their European headquarters to Paris after Britain pulls out of the EU? Not so fast.
The French capital’s campaign to pull in jobs from London — particularly in the prestigious finance world — clinched a victory this week when the EU chose Paris to take over the European Banking Authority from London post-brexit.
President Emmanuel Macron, whose government has set aside quiet diplomacy and relentlessly lobbied for post-brexit jobs, tweeted his joy. Goldman Sachs CEO Lloyd Blankfein tweeted his appreciation last week for the “positive energy” in Paris — and the world-famous food.
But the competition is fierce. From Dublin to Frankfurt, Luxembourg or Amsterdam, cities across the continent are vying to draw business away from the London, as financial companies look for a new hub allowing them easy access to markets in the 27 nations remaining in the open-border EU.
Instead of relocating wholesale, however, London’s financial activities may instead splinter across all of them — or stay put.
Macron’s six-month-old presidency has already had a remarkable impact on investor confidence, but “most investors do not plan to move their companies from Britain to France,” said Marc-andre Kamel of Bain and Co., which conducted a survey with the American Chamber of Commerce released Thursday on business confidence in France.
“There is a slight boost in sentiment that Brexit will help France … but there are still a lot of uncertainties,” he said.
Citigroup will make a “partial move” toward France as well as other cities, said its France director Mathieu Gelis, who called the choice of Paris for the EBA “a super-positive sign.”
Macron promises to reduce the high labor costs, rigid work rules and confusing taxes that have sent more and more companies fleeing France in recent years, and prevented new ones from settling in.