Daily Management Review

France Makes A Late But Promising Entry In The Race To Win Brexit Businesses


France makes an attempt to dispel its image “as a country of high taxes and strict labor laws”.

In an attempt to promote France as “more ‘finance-friendly’”, the government is taking an initiative, whereby increasing the chance drawing the “Brexit-fleeing banks from London” to Paris. However, “a group of senior financial industry executives” think that the stage step taken up by France comes at a “late stage in the process”.
The Prime Minister of France, Edouard Philippe, outlined plans of easing the “financial sector's wage bills” in order to compete with Frankfurt from attracting the “bilk of the jobs” leaving London. Moreover, the Prime Minister has also promised to “keep the regulatory burden competitive”. Business executives gathered in a conference that took place in the southern part of France stated that the election of “former investment banker Emmanuel Macron” in the month of May has brought about an overnight change of the industrial attitude.
Taking a note on the stark difference between “Macron's predecessor Francois Hollande”, the Head of “UBS France”, Jean Frederic de Leusse, said:
“The government clearly wants to make France finance-friendly”.
In an announcement Philippe revealed that the “highest bracket of payroll tax” will be scrapped for the “firms like banks that do not pay VAT”. At the same time, a tax extension plan on “share trading” has also been cancelled. Likewise, under the new policies, the bonuses of the bankers will not be accounted when labour “courts decide unfair dismissal compensation”.
Other cities have moved ahead in the race of wining London fleeing jobs, therefore even though the Head of “Deutsche Asset Management”, Nicolas Moreau, considers Philippe’s “package of measures” to be a taken France in the “right direction”, he also reminds that Paris has “a lot of catching up to do”. In Moreau’s words:
“Today Frankfurt has a big lead, a lot of decisions have already been taken”.
Although, UBS has maintained “stronger ties to Frankfurt”, at this juncture nothing is decided as the next destination its staffs, “nothing could be ruled out”. In an interview Leusse added:
“Right now I don't know what to tell UBS bosses about what is going to change in France, whether things are really going to change”.
It is going to be a difficult task to change France image into a tax friendly one with easing labour laws. Head of “Generali France”, Eric Lombard, said:
“The main blocking point is psychological. That means that our partners will have to be convinced that France is serious about developing its economy and attracting financial services”.
While, the Head of “Euronext European financial market operator”, Stephane Boujnah, added:
“We've entered a phase where competition between different European financial centers turns around fundamental issues that have little to do with taxes”.
On the other hand, the Ex-governor of Bank of France, Christian Noyer stated:
“I know of some people who say 'I'm setting up my base in Frankfurt but I'm putting my trading rooms in Paris in a subsidiary. I'll create a few jobs in Frankfurt but the bulk is in Paris'”.