European businesses would be better off if London could retain financial services dominance after Brexit, says German minister

William Turvill
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Frankfurt Skyline At Night
Thomas Schaefer expects Frankfurt to grow as a result of Brexit (Source: Getty)

Businesses across Europe would be better off if the City were able to maintain its financial services dominance, a senior German minister has admitted.

Thomas Schaefer, who is finance minister for the state of Hesse, where Frankfurt is based, was speaking on a visit to London, where he has been in talks with several banks considering shifting resources to Germany because of Brexit.

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While he conceded that Frankfurt stands to benefit to an extent from the UK leaving the European Union – with the city expected to draw in financial services jobs from London – Schaefer described the general political mood in his country as “very sad”.

But he said: “We believe Frankfurt will grow, because banks will have to relocate… for passporting [reasons]. The banks are, at the moment, busy checking where to relocate to. But we think that Frankfurt is in quite a good position because it has this very quiet attitude and does not [believe in] noisy advertising.”

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Schaefer revealed that banks and other firms he is speaking to are preparing for the “worst-case scenario, and if anything better than worst-case happens it is considered a bit of a bonus”. He said they will be making relocation decisions within the next three to six months.

Asked whether he was concerned that the economy could suffer as a result of financial services firms being dispersed across the continent rather than concentrated in London, Schaefer said: “It would be much better if London remained the centre, because financing will become more expensive for continental firms. And it will become more expensive and more difficult to conduct financial business.”

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