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December 3, 2012 3:01 pm
Boris Johnson has launched an offensive against France’s central bank governor, accusing him of a “naked attempt to steal London’s financial crown”.
The mayor of London spoke out after Christian Noyer, governor of the Banque de France, told the Financial Times the eurozone nations should gain “control” of the bulk of the currency union’s financial business, which is centred on the City of London.
Mr Johnson told the Evening Standard newspaper: “This is a desperate French attack in an effort to make something out of the eurozone crisis . . . shows utter contempt for the principles of the single market, and it will not succeed.”
Mr Noyer said there was “no rationale” for allowing the eurozone’s financial centre to be “offshore”, prompting sharp rebukes not only from Mr Johnson but also Vince Cable, UK business secretary.
“I don’t think his analysis is correct,” Mr Cable told reporters while on a visit to Paris on Monday. “[It is] rather contradicted from what I pick up from serious French bankers [who believe that] having a strong UK financial sector is important for Europe. It is not a zero sum game. We want to be part of a single market in financial services.”
The dispute broke out ahead of a meeting in Brussels on Tuesday where EU ministers will attempt to agree a deal handing the European Central Bank broad supervisory powers over banks.
Amid fears that the City will be sidelined under the new arrangements, George Osborne, UK chancellor, will push for safeguards to prevent eurozone members dictating rules to nations outside the currency union.
Mark Boleat, policy chairman at the City of London Corporation, the local authority for the capital’s financial district, said the City supported the eurozone’s efforts to resolve the financial crisis, but warned that “anti-competitive or protectionist measures” would damage its reputation as a place to do business. “As the continent’s financial capital, London is not just a British asset but a European one too.”
He added: “Any reforms must maintain the integrity of the single market’s level playing field.”
Downing St said it was determined to ensure the European single market was not undermined in any way, while aides to Mr Osborne said Mr Noyer’s comments reflected decades of French thinking.
“It’s big talk but the reality is we’re confident that we can preserve the single market in financial services,” the aide said. “A global financial centre in London is good for the whole EU, not just the UK. The alternative isn’t Paris or Frankfurt it would be Shanghai, Singapore or New York.”
Nick Clegg, deputy prime minister, aims to raise questions about the proposed eurozone banking union - and the need to protect the City of London’s interests - in the margins of the ceremony to award the EU with the Nobel Peace Prize in Oslo next week.
Prime minister David Cameron is snubbing the ceremony after his suggestion that schoolchildren should represent member states was rebuffed by other EU leaders including Germany’s Angela Merkel and France’s François Hollande, who wanted to attend.
Additional reporting by George Parker in London
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