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Emmanuel Macron's victory in the French presidential election and his plans to swiftly implement structural reforms is a boon for Paris in its efforts to attract banks and other financial service companies seeking to move operations out of Britain, the head of lobbying group Paris Europlace said on Monday.
Britain's decision to leave the European Union has opened up fierce competition among financial centers elsewhere in the bloc, including Paris, Frankfurt, Dublin and Luxembourg, to attract banks and other financial companies seeking to secure continued access to the single market once Britain leaves.
Hitherto bankers have been skeptical that France can attract much of the UK financial industry, with high labor costs and a frequently changing tax system seen as major deterrents.
"Macron's win is a sign that France is on the road to implement more structural reforms that are needed," Arnaud de Bresson, chief executive of Paris Europlace, told Reuters, estimating that Paris could attract 20,000 workers from Britain.
"Macron will personally make it his mission to convince the international banks as well as investors of the benefits of Paris," he added.
The new president is promising to overhaul the labor market and simplify the French tax and pension systems, while paring back regulations he says hamper innovation. But there is a lot of uncertainty about the likely pace of reforms, which could take months or even years to implement.
"Macron's victory will spur a redoubling in the sales pitch for Paris. They are going to go all out," a banking source at an international bank said.
A delegation from Paris Europlace, together with Christian Noyer, the former French central bank governor, will travel to the United States on May 22 and May 23 to try to persuade the financial industry there to choose Paris as their European base.
Europlace had already held about 100 meetings with large international banks as well as asset management, investment, insurance and fintech companies in London, New York, Shanghai and Tokyo, it said in March.
"Lots of banks have been waiting for the results of the election before making a decision on relocation plans and Macron's election will give a boost for the choice of Paris," said de Bresson.
He added French regulators were offering fast-track solutions to banks and asset management firms seeking the required licenses and that Macron has pledged to implement labor law reforms within his first 100 days in office.
Ugly fight
Nearly a year on from the Brexit vote, most banks and asset managers have already started to implement their contingency plans, including deciding on a European City from which to base their EU operations.
The five largest U.S. investment banks are set to move hundreds of key staff within two years from London to Frankfurt, the city's chief lobbyist told Reuters on May 5.
So far, only HSBC (HSBA.L), Europe's biggest bank, has said it could move some of its operations to Paris where it has a subsidiary that holds most of the licenses needed by an investment bank thanks to its purchase of CCF in 2000.
Before the vote on Sunday, Valerie Pecresse, the head of the wider Paris region, said on Twitter that London-based firms were effectively waiting for a Macron victory to pull the trigger on relocation plans to Paris.
"If Marine Le Pen is elected 30 London-based companies ready to relocate to the Paris region have told us they would give up their plans."
Paris has a network of international law firms and asset managers and the city is also home to the European markets authority, ESMA.
"This is a fight that will get ugly, with Macron trying to attract as much business as possible away from the UK ... Macron is going to lower corporate taxes, create incentives to invest in equities, and reduce red tape. This will make Paris a magnet to wrest business away from London," said Octavio Marenzi, CEO of Opimas, a capital markets management consultancy.
(REUTERS)
