Paris is bidding to become Europe’s prime financial centre as it looks to lure London-based banks and investment firms to its financial district in the event of a Brexit vote on 23 June.
The French capital’s financial centre has been increasing its profile in recent weeks, as it bids to leapfrog German rival Frankfurt as a new European alternative for financial firms and banks.
However, a international finance centre expert has questioned its suitability, due to internal issues in France and potentially better options elsewhere in the Eurozone.
The group set up to promote the Paris financial marketplace – Europlace, said that it hoped that the UK remains in the EU, in a statement on its website, but also pointed to the need for “further economic integration in Europe with a financing and investment union”.
‘Next steps to attract international companies’
It also highlighted its own strengths as it indicated the “next steps to attract international companies” wishing to develop their activities in Europe.
“Among those measures: better fiscal stability, measures in favor of long-term savings measures, reduction of corporate tax, and finally the removal of payroll tax,” the statement read.
However, Mark Yeandle, associate director at the Y/Zen Group, a firm that specialises in dealing with global financial centres, questioned the suitability of the French capital’s plans.
Yeandle agrees that there could be a form of exodus from the City in the event of a Brexit, but pointed that it would not be as widespread as some commentators are suggesting.
“I think that there will be an affect on the City, but I am not too sure how many will leave” he said. “The big US banks I suggest will stay but if they wanted to move (to somewhere in the eurozone) then they might look at somewhere English speaking like Dublin.
Paris over Frankfurt?
“But will European-based financial companies choose Paris over Frankfurt? I am not so sure. Maybe some of the French banks, but Frankfurt and even Luxembourg may be better options if companies want to leave.”
Yeandle also added that many firms will simply move staff to their regional offices instead of a new European finance centre.
Paris Europlace, recently showcased an event held on May 30 dubbed: “Place financière de Paris 2020”. It was chaired by Michel Sapin, minister of finance and public accounts, and co-hosted by the French Treasury department, where it highlighted: “the advantages of the Paris marketplace, with the aim of serving the economy”.
But, as Yeandle adds, good intentions from the centre could be tapered by difficulties within the French Government such as “possible increase in taxes”, harsh regulation on financial services and a possible right wing change in the next French general election.
“Sometimes they (the French financial service regulator) appear to want to regulate financial services out of existence. That is one of the reasons why I just don’t think that Paris will benefit from a Brexit,” added Yeandle.