‘Having Financial Hub of Europe on the Continent is Good News for EU’ – Journo

Radio Sputnik has discussed the possibility of Paris replacing London as Europe’s financial hub with Alexis Poulin, a leading EU policy analyst and Co-Editor of Le Monde Moderne magazine.

Sputnik: It’s quite interesting news that Paris is most likely to emerge as Europe’s new financial hub after Brexit; is it good or bad news for Europe?

Alexis Poulin: I think it’s good news for Europe because the UK and the Brits have always been seen as reluctant Europeans. So having the financial hub of Europe on the continent is certainly good news for all the EU economies. It just depends on how other countries would react to France having a leading role in the finance sector while other financial places were lining up to get most of the Brexit exodus of the financial companies. So wait and see, I would say.

READ MORE: No-Deal Brexit Could Lead to Financial Crisis as Bad as 2008 – Bank of England

Sputnik: Was this an unexpected development or were all the signs there that Paris would emerge as the new financial hub most likely?

Alexis Poulin: I think it was most likely due to the election of Emmanuel Macron first who tried to make France very attractive again to international finance and international investors. The proximity with London also makes sense as most of the financial companies, trade and banks already have big operations in Paris, so we just wait [for them] to pick up and speed up their operation here. I think that Paris is the best deal because traders and bankers they need their fun. So you need a big city with cultural attraction and infrastructure but also the size that is enough for these kinds of money-making people.

Sputnik: You’ve mentioned Macron; there have been opinions out there that the election of Macron and the restoration of what they call the business-friendly attitude in tax and labor policies has been key and instrumental in this process. Would you agree?

Alexis Poulin: Yes, I think that it’s more an image, a communication more than real policy. There have also been some laws that have been passed but really I think that the mood is to say okay, let’s try France with this new president that wants to shake it up and show they started (2:17) regulation about labor and new tax regulation which is not up in the legislation yet. But I think clearly the message has been out and it reminds me of what Tony Blair did with the UK when he did the “Cool Britannia” campaign when he was elected first. Clearly, the climate of international investment and people are looking at Paris as a big hub not only the financial companies but also the GAFAs. Facebook has a big operation on artificial intelligence in Paris; Amazon as well is opening new offices. There is an attraction of France and of Paris that is directly linked to this new president and the image that he wants to promote of France.

Sputnik: Let’s look at how Paris and France are going to benefit from the changes. This is going to bring new blood and more finances; what’s going to happen?

Alexis Poulin: I don’t know. For Paris it may be like in London. Rents will go up; life will be more expensive because if you get all these people with big salaries coming to Paris everything will be more expensive. So, it’s not good news for  Parisians on top of the Olympics, meaning that life is already expensive in Paris; it’s going to be even more expensive in the coming months. For France, clearly there would be some more investment, but you know it’s very volatile. The investment can come and go in a dash, especially with the future of Europe [being] very under question with, for example, Italy now going full frontal with Europe saying “we will have a budget that is not what you expect in Brussels.” So, it’s all up in the air and we’ll have to see but I think that the direct benefit will just be Paris on the map of the financial market and the drawback will be rent rising up.

Sputnik: Of course, there were other suggestions earlier on. Frankfurt and Dublin were discussed as new hubs instead of London; why did the focus move to Paris?

Alexis Poulin: I think that is because these companies already have big operations in Paris. They know the place and they know they can grow up very easily. There’s good infrastructure in France. It’s a stable country, and it’s in the heart of Europe and European policies. All these reasons I think, made Paris the easiest choice for these companies.

Sputnik: London, of course, has vowed to “do whatever it takes to remain the center of finance following Brexit”; how likely is this to happen? Is this at all possible?

Alexis Poulin: Yes, I think that London will remain a key financial market because of the pound and because of the UK and the Commonwealth. They surely have a card to play, but if they want to be part of the European game leaving the EU was not a clever move. What they will keep will be maybe some asset management or banks that have international trade at heart; they can keep something but the main companies that tend to have the lobbying role into EU finance will definitely move to Paris. So, that’s very difficult and tricky for London to remain the spearhead of the international finance in Europe.

Sputnik: You’ve already basically broken it all down to the benefits and the downside of all of this happening; but if we break it down into long-term and short-term prospects of Paris becoming the new financial hub, what would you say there?

Alexis Poulin: For the short term I would say there’ll be more investment, Paris on the map, more companies coming and registering in Paris. The long-term drawbacks are whether the city is big enough and ready to play that role, can we accommodate all the people within Central Paris or Greater Paris.

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect those of Sputnik.