Frankfurt Pushes for U.K. Finance to Access Single Market--Update
12 July 2016 - 2:43AM
Dow Jones News
By William Wilkes
FRANKFURT--Frankfurt will push for the U.K. to be allowed the
maximum possible access to the single market in financial services
following the country's vote to quit the European Union, even as it
hopes to attract jobs from a Brexit fallout.
Frankfurt officials said that while U.K. cannot be given
unconditional access to the single market, it will benefit
Frankfurt to see London maintain its status as global heavyweight
located in the region.
"We think the U.K. should be offered the utmost access to the
single market, depending on what trade model the U.K. government
decides upon," said Hubertus Väth, managing director of Frankfurt
Main Finance, the group promoting Frankfurt.
He said that rather than trying to supplant London as a global
economic hub post-Brexit, nearby Frankfurt is better-positioned for
a supporting role.
"Frankfurt has decided to be the bridge to the financial center
of London," said Mr. Väth.
Top officials from Germany's central bank met with local
politicians and financial sector lobbyists in Frankfurt on Monday
to discuss a campaign to lure some financial jobs away from the
U.K. capital. Frankfurt officials said after the meeting that they
will visit London in mid-August to promote Frankfurt as an
alternative location for firms worried about Brexit, but Mr. Väth
said that Frankfurt would likely only attract a very small slice of
the more than 700,000 financial services jobs in London.
"We believe London will remain the foremost financial center in
Europe. It is not our strategy to weaken London," Mr. Väth
said.
The U.K.'s vote to quit the European Union has raised concerns
about whether banks there will retain access to the single market.
Whether the U.K. gets a deal that allows it to sell financial
products across the EU--so-called passporting--is likely to be a
key factor in banks' decisions on whether they stay in London or
relocate to other EU cities such as Dublin, Paris or Frankfurt.
The French government has insisted U.K. financial services would
lose single-market access if the British government refuses to play
by the rules of the EU. Frankfurt will press policy makers in
Berlin and Brussels to grant the U.K. the maximum access possible,
conditional on what trade agreement London reaches.
"We clearly disagree with any sort of punishment," Mr. Väth
said.
Frankfurt's open position on Brexit echoes that of Deutsche
Börse AG, which remains committed to its planned $30 billion merger
with London Stock Exchange Group PLC despite the U.K.'s vote to
leave the EU.
Hessian Economic Minister Tarek Al-Wazir of the Green Party said
Monday that he was worried about the uncertainty enveloping the
U.K. economy. Mr. Al-Wazir said that while Brexit held
opportunities for Frankfurt, the city has a strong interest in U.K.
stability.
"Where do all these people who come to stay in hotels in Hesse
come from? There's a lot of media coverage about the Chinese but
there's still more visitors from the United Kingdom," Mr. Al-Wazir
said, speaking of the German state where Frankfurt is located.
Even if Britain is allowed to keep some rights to the single
financial market, there's still plenty of interest among other
cities in capturing a chunk of London's financial jobs.
Ireland's foreign investment agency has written to businesses
with offers to help them relocate to Dublin, while Stefan Franzke,
chief executive of Berlin Partner, an agency sponsored by the state
and companies in Berlin to promote the German capital, has
assembled a 12-person team with the task of attracting more
business from London to Berlin.
In Paris, Prime Minister Manuel Valls last week publicly called
for Paris to be "the premier financial market of Europe," pledging
to extend a favorable tax regime for expatriates and to create
places in bilingual schools for foreign children.
Write to William Wilkes at william.wilkes@wsj.com
(END) Dow Jones Newswires
July 11, 2016 12:28 ET (16:28 GMT)
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