France would be happy to see the City of London damaged by Brexit, “even if Paris is not the beneficiary”, according to a memo sent to ministers this month by Jeremy Browne, the City of London Corporation’s Brexit envoy.
The leaked letter emerged this weekend, shortly after Paris Europlace, the lobby group aiming to lure up to 20,000 financial services jobs from the UK as a result of Brexit, welcomed bosses from the likes of JP Morgan and HSBC to a conference promoting France’s appeal to business.
No one at this conference, hosted on the edge of the Bois de Boulogne, wants the UK to vote for Brexit – or, at least, no one admits to it – but they are ready to move on. There is a general feeling that the City of London is going to lose out. And there is also a belief, strengthened by the election of former banker President Emmanuel Macron, that Paris can be a major beneficiary.
JP Morgan chief executive Jamie Dimon was the star of the show for Europlace and struck all the right notes. “It’s a beautiful city, it’s got education, diversity, technology, it’s got a new a President who I think is great,” Dimon says. “It’s nice to be wanted. He wants a financial centre.”
JP Morgan is planning to move hundreds of employees from the UK to other EU cities before the UK leaves the bloc in March 2019. And Dimon believes the EU could “dictate” that the firm move thousands more staff from the UK later on.
Speaking ahead of a lunchtime speech by France’s prime minister, Edouard Philippe, Dimon also indicates that his “ears are wide open”. “We are here to listen to them, and hopefully maybe this will be a place where we put a lot of people,” he says.
More than just a pretty place?
Christian Noyer, a former Bank of France governor who is lobbying for firms to invest in Paris, describes the election of Macron as a “game-changer” for the city, giving it an advantage over others competing for the Brexit spoils.
Gerard Mestrallet, chairman of Paris Europlace, says: “We are convinced that Paris can offer win-win opportunities to international companies wishing to develop their activities in the post-Brexit European Union.”
Noyer, Mestrallet and others are particularly keen to highlight a package of reforms laid out by the government this month, aiming to make the country more attractive for businesses.
The plans include a shake-up of labour laws and a commitment to cutting corporation tax from 33 per cent to 25 per cent within five years.
At lunch, prime minister Philippe tells attendees, in English: “We want Paris to become Europe’s new number one financial hub after Brexit.”
Despite the sense of optimism in Paris, figures released last week rather put things into perspective for France. According to EY, Paris is currently trailing Dublin, Frankfurt and Luxembourg in the race to lure financial services companies from the UK.
Probably the most high-profile victory for Paris to date is HSBC. Appearing at the Europlace event, chief executive Stuart Gulliver confirms that up to 1,000 of his 43,000 UK staff will be moved from the UK to France in the case of a hard Brexit.
He welcomes the government’s pro-business reforms, but also strikes a note of caution: Will Macron retain power over two terms? How far can France move on from the days of his predecessor Francois Hollande?
“Obviously the package of reforms that was suggested last week is very, very positive for France if they’re enacted,” he says. “[But firms] are obviously going to consider whether or not that package of reforms is going to stay. I.e. it’s very early in the presidency, and people will still have very fresh in their minds that President Hollande declared that finance is the enemy.”
The clock is ticking towards Brexit in March 2019. With financial services firms seeking to make relocation decisions swiftly, Paris needs to act fast in order to emerge as a major Brexit beneficiary.