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January 31, 2012 8:38 pm
Boris Johnson, London mayor, has made a direct pitch to French financial services workers to move to London to escape what he believes is an increasingly hostile political climate on the other side of the Channel.
Nicolas Sarkozy, French president, is planning to introduce a financial transactions tax, while François Hollande, his Socialist rival in presidential elections this spring, has made it clear he sees banks and finance to be at the heart of his country’s economic problems.
London is already home to an estimated 300,000 French people – many of whom work in the City – and Mr Johnson believes even more may be tempted to get on the Eurostar in the months to come.
The mayor said: “Bienvenue à Londres. This is the global capital of finance. It’s on your doorstep and if your own president does not want the jobs, the opportunities and the economic growth that you generate, we do.”
Meanwhile, David Cameron, prime minister, has described as “madness” Mr Sarkozy’s idea for a unilateral tax on financial trading and share dealing. Speaking at an EU summit in Brussels, he said: “If France goes for a financial transactions tax, then the door will be open and we will be able to welcome many French banks to the United Kingdom.”
In the run-up to the 2007 presidential election Mr Sarkozy campaigned in London, in the midst of a pre-crash crush on the city and its freewheeling financial capitalism. Speaking at Old Billingsgate market, he said of his exiled countrymen: “They leave because they don’t have diplomas, and no one wants to give them a chance. They leave because they are risk-takers, and risk is a bad word.”
France’s big banks, led by BNP Paribas and Société Générale, have been critical of President Sarkozy’s plan to press ahead with a financial transaction tax unliterally.
However, industry experts have pointed out that in many cases it will be irrelevant where a bank is headquartered, since the tax will be levied on the transaction dependent on where the end client is located. For a French client, it will make no difference whether the bank carrying out the transaction is based in Paris or London.
The threat of an EU-wide transaction tax issue was one of the key motives behind Mr Cameron’s decision late last year to walk away from talks over a proposed EU treaty change. The government has ruled out imposing a UK tax without a similar regime being imposed elsewhere in the world.
French bankers brushed off the comments by Mr Johnson and Mr Cameron, saying it was premature to judge the nature of a scheme that was still in the early stages of drafting.
French bankers are more concerned about the prospect of a Socialist government, under Mr Hollande’s leadership. “He does not have a good agenda for the financial industry,” said one senior banker.
Although large chunks of both BNP and SocGen are run out of London, both banks’ centres of gravity remain firmly in Paris.
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