French unite to lure financial services to Paris

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Paris

In a rare moment of unity across the political and corporate divide in France, Socialist Prime Minister Manuel Valls addressed hundreds of bankers alongside Valérie Pécresse, the centre-right head of the Paris region who has led the charge to lure financial services to the French capital in the wake of the UK referendum.

It was the first time a French prime minister has spoken at the annual conference of Paris Europlace, a lobby that promotes France as a financial centre.

France regrets the UK vote to leave the EU, Valls said, but he urged Paris to be ready to take advantage of a “rebalancing” of the financial and economic influence of European cities.

“Of course we should be graceful. But we mustn’t be naive: we are in competition,” Valls said. “We want Paris to be the premier financial market of Europe.”

• BREXODUS: THE BEST EU HAVENS FOR UK EXILES

The ostentatious attempt to siphon businesses and finance from London shows how France has quickly moved to capitalize on the Brexit vote, even if it could take at least another two years before the UK formally leaves the EU.

The French government has called for a swift exit of the UK and insisted the country cannot have access to the single market – in particular for financial services – if the British government refuses to play by the rules of the EU. That could oblige some companies to set up in other EU countries to keep easy access to the EU’s single market.

Paris faces stiff competition to woo Britain’s bankers. Frankfurt, home to the European Central Bank, set up a website and hotline to help companies and individuals move to the region. Ireland’s foreign investment agency wrote to more than 1,000 investors with a similar message.

The fight extends beyond big banks. Germany’s business-friendly Free Democratic Party this week paid for a colorful truck to drive through London with the slogan: “Dear startups, Keep calm and move to Berlin.” France, which aggressively promotes its startup ecosystem under the brand La French Tech, is also making a pitch.

Speaking at the conference Wednesday, Paris Mayor Anne Hidalgo said she would increase initiatives to lend to startups and provide them with offices shared with other companies. “Whatever the sector, we must be able to offer services to help with every step of setting up in Paris,” Hidalgo said.

Valls had little to offer to convince investors dissuaded by France’s reputation for high taxes and rigid labor laws. His main pledges were an extension of the favorable tax regime for expatriates in France to eight years form five, and a promise to create places in special bilingual schools for foreign children.

Bankers speaking at the conference here were also cautious about how quickly the center of gravity for international finance could shift away from London. BNP Paribas chairman Jean Lemierre said his bank is very happy having large operations in London and will wait to see where the demand for business is in the future.

“There is no plan B,” Lemierre said.

Bank of France Governor François Villeroy de Galhau said the UK has the most to lose by exiting the EU. “Paris isn’t the only financial center in the euro area, but it has everything it needs to be one of the best,” he said.

Pécresse, who served as budget minister in the government of former President Nicolas Sarkozy, has taken a particularly forceful approach to luring businesses to Paris. She has sent letters to thousands of UK-based businesses and set up a hotline in English for entrepreneurs looking to relocate to the Paris region.

Speaking at Paris Europlace, she switched to English to poke fun at UK Prime Minister David Cameron and Boris Johnson, the former mayor of London who campaigned for the UK to leave the EU.

“David Cameron and Boris Johnson once said they were ready to roll out the red carpet for the French firms of London. Well, as good friends do, I’m very happy today to return the invitation,” Pécresse said. “Brexit has cast a new sense of urgency: we need to act rapidly to offer an alternative for those who wish to stay in Europe.”

Write to William Horobin at William.Horobin@wsj.com

Sam Schechner contributed to this article, which was published by The Wall Street Journal

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