London and Paris: This doesn’t have to be a zero-sum game

Delphine Gény-Stephann
Emmanuel Macron wants to make Paris a leading global financial centre (Source: Getty)

As I begin a two-day visit to London, I come with two main messages as the French minister of state attached to the minister of the economy and finance.

First, France is changing. After years of talking about reforms, we are actually now carrying them out. We are making France more open to business, more investor-friendly, and more competitive.

Second, we want to make Paris a leading global financial centre. But this does not need to be a zero-sum game between London and Paris. We are already deeply interconnected, and our activities can – and should – be complementary.

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The financial businesses I talk to are clear: Brexit means that they will have to adapt their business model, as – whatever the final outcome of the negotiations – some services will be delivered differently from the way they are today.

In the same way that London and New York’s markets are deeply interdependent, with financial activities across the Atlantic spawning a wide range of activities, a similar successful financial relationship can be built between London and the rest of the EU.

Irrespective of Brexit, France will also continue to press ahead with economic reforms at home.

In the first year of Emmanuel Macron’s presidency, the government delivered reforms that had been considered impossible for many years.

We have overhauled our tax system to make it simpler and more efficient, reducing the corporate tax rate and introducing a flat-tax on capital gains. We have implemented deep changes to the labour market to make it more flexible and predictable. In particular, we have capped redundancy costs.

And we will not stop there.

Above all, we want to cut red tape and make it easier for businesses to set up, and for our vibrant SME sector to grow. Some measures we are pushing for are specifically geared towards the financial sector, which already contributes four per cent of our national wealth and represents 800,000 jobs. We are making it easier for finance personnel to move to Paris, and cutting costs for the employers of highly qualified employees – for example for pension contributions.

To reflect the more global nature of Paris as a financial center, we are creating an international commercial court that will apply common law and work in English. The court’s judgments will be enforceable throughout the EU.

We are also looking towards the future. We want Paris to be a global hub for innovation in the financial sector. We are extremely supportive of the new technologies that are transforming the financial sector, such as artificial intelligence.

What we are designing now is a sensible regulatory environment that addresses risks but also enables the many opportunities in the fintech sector to flourish, such as those created by blockchain.

Last December, we were the first country to create a legal framework that enables the transfer of fund shares and non-listed securities through a blockchain.

And we’re setting up an optional “quality label” for initial coin offerings (ICOs), that will inform investors whether an ICO meets certain basic requirements. It should both encourage greater investment and provide protection for investors.

France, like Britain, is also dealing with the legal issues raised by Brexit. We collaborated with ISDA (the international swaps and derivatives association) to design a new European civil law version of the Master Agreement for derivatives under French law. We have done that work, and the European civil law ISDA contract is now live.

These are a few of the examples of the new risk-taking, innovative and business-friendly France this government is creating. We are looking forward to the many opportunities for London and Paris to seize in coming years.

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