By Ashley Osborne | Head of UK Residential & Managing Director – International Properties
Following the Brexit vote, the race to succeed London as Europe’s financial capital is on, with Dublin, Frankfurt and Paris all throwing their hats in the ring. Other countries in the European Union have also expressed interest in attracting financial institutions from the UK – even the economy minister of Bulgaria, the EU’s poorest country, invited City of London escapees.
The reality however is that there remains no alternative in the EU (and arguably globally) to London as the world’s financial capital for numerous reasons. There is a unique set of criteria required to be a world financial capital which we have outlined below:
- Laws which underpin global financial markets trading
- Native English language speaking which is essential for attracting a global workforce
- Excellent transportation and communications infrastructure
- Availability of prime office space and luxury housing
- A superior school and University system
Looking at the three main contenders none seem to meet all of these in the same way London is able to – in or out of the EU.
Paris has a population of 12 million, similar to that of London and is already a major player as a global financial services centre. While this makes it seem a viable alternative in principal, in reality this is not the case. France’s strict labor laws mean it is difficult if not impossible to fire people which will put off many financial services who have large headcounts and need to be flexible to outside factors which can affect staff count. English is also not widely spoken (including in schools) and France has a reputation of being hostile to people who don’t speak French. This hostility also extends to those working in financial services with an inherent dislike of the wealthy– this does not bode well for international bankers. The recent spate of terrorist attacks and the fact that the country remains at risk also makes it even less of an option.
As the only native English speaking country in the EU post Brexit, Dublin has a lot going for it when it comes to being considered an EU alternative to London as a world financial hub. In addition it has excellent schools and offers many of the advantages of London, just on a smaller scale, with a unique and charming culture. It’s small size however is its biggest downfall meaning that there is a lack of business and housing space to make it viable. It is geographically distant from the rest of Europe, and lacks London’s direct rail link to the continent, as well as lacking infrastructure in general – most notably its international airport is poorly ranked in terms of global standards.
Being home to the European Central Bank, Frankfurt is an obvious choice. It’s the financial capital of Germany, Europe’s largest economy and dominant political force. It is not however, a particularly exciting city and many will be put off by what they see as Germany’s over-dominance of the EU – something London was able to counterbalance. Its labor laws are also rigid, and again similar to France English language may be an issue as it is not widely spoken. It also has a relative small population at just over 2 million.
Ultimately, either in or out of the EU, what makes London a financial player is not changing and it will remain an important financial centre. It has survived depressions and world wars, and going on past track record – it will survive Brexit.