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France lures post-Brexit banks to Paris

Jane Mcintosh
July 8, 2017

Speaking on top of Paris' mint, France's prime minister set out a raft of measures designed to welcome bankers from London to Paris after Brexit. Tax breaks and international schools are part of the offer.

Frankreich Paris Premierminister Edouard Philippe (M), Valerie Pecresse, President of the Ile-de-France region, and Paris Mayor Hidalgo PK
Image: Reuters/P. Rossignol

French Prime Minister Edouard Philippe set out plans including elimination of the top income tax bracket and excluding bonuses for the calculation of severance pay for stockbrokers as part of Paris' plan to welcome financiers and finance companies from London.

"You can regret this (Brexit) decision or welcome it, but it's a fact," said Philippe, speaking on the roof of the Monnaie de Paris on Friday, with La Defense financial district behind him in the distance.

"You have to deal with it."

There has been fierce competition between Paris, Frankfurt and Dublin to attract banks based in the City of London that are concerned that so-called "passport" rights to doing business throughout the EU will be lost after the UK leaves the bloc.

Several banks have already announced they are to move their banking activities from London to Frankfurt. Deutsche Bank was reported last week to be moving its investment banking activities from London to Frankfurt.

'Welcome back'

Paris regional president Valerie Pecresse made her point, partly in English: "To investors, and to those disappointed by Brexit, I want to say that we are ready to roll out the blue, white and red carpet for you," and added in English: "Welcome back to Europe."

Philippe said work had begun to establish an international tribunal in Paris to handle financial cases in English, a reference to the fact that most international financial contracts are written in English with reference to English law.

France's financial transaction tax (TTF), first introduced in 2012, was to have been extended to include "intraday" transactions from 2018, but plans to broaden the current 0.3 percent tax have been scrapped.

"We are determined to make Paris more competitive and attractive," Philippe said.

France is also planning to build three more international schools targeted at expatriates' children in the greater Paris region by 2022. There are currently six international schools in the region.

The financial sector in France represents about 4.5 percent of national output and employs around 800,000 people.

jm/ss (Reuters, AFP)