London loses key EU agencies to Paris and Amsterdam
In the first tangible sign of the impact of Brexit, Paris and Amsterdam have been chosen as the new homes for two prized EU agencies. The FT's Jim Brunsden tells Rochelle Toplensky how the decisions were reached.
Presented by Jim Brunsden and Rochelle Toplensky; produced by Fiona Symon
From The Financial Times in Brussels, I'm Rochelle Toplensky and this is FT News.
Paris and Amsterdam have been chosen as new homes for two prized EU agencies after ministers in Brussels resorted to pick names from a hat to decide whether two organisations and combined 1,000 staff should move after Brexit. Here with me to discuss this is Jim Brundsen, the FT's EU correspondent. So Jim, tell us exactly what happened.
Yeah, sure. Well, basically, it was a very strange day in some ways yesterday in Brussels because the 27 EU countries apart from the UK actually managed to take two quite politically-sensitive decisions on where to move, firstly, the European Medicines Agency, and secondly, the European Banking Authority, after Brexit.
Traditionally, in the EU, these kind of location decisions for prized EU institutions and bodies are incredibly difficult to take because there's tonnes of horse trading behind the scenes, and there can be very high-level political battles over them. Often, it can be the actual prime ministers and presidents of the EU who have to decide this at late-night summits. So what was kind of surprising about yesterday was we had two straightforward decisions on where to move these agencies that were taken using a voting system that produced clear results, and we were done and dusted in three hours.
What happened in practise is that Paris will be the new home of the European Banking Authority, which up to now has been based in London. And Amsterdam will be the new home of the European Medicines Agency, which is far larger than the EBA and has also been based in London up to now. But it took several rounds of voting for us to get there and a little bit more, which I can explain in a bit.
Why did Paris and Amsterdam emerge as the winners of the contest?
Well, it's an interesting one. Neither of them are surprise winners. Both were seen as frontrunners. But the process that got us there was-- maybe suspense filled is a slight exaggeration-- but it was a process where, even right towards the end, it genuinely wasn't clear who'd won. So in order to deal with these decisions of where to locate the agencies after Brexit, the EU decided to use a voting system.
So each country in the vote was assigned one three-point vote, one two-point vote, and one one-point vote that they used in a secret ballot. This meant that, for example, there were 19 countries in total competing for the Medicines Agency, although three dropped out just beforehand. So all those who are competing, they're likely to give themselves their three-point vote in the first round. Nevertheless, there was scope for loads of kind of horse trading and bargaining behind the scenes in the months leading up to the vote.
And also, in the end of the day, the voting system didn't quite deliver in the sense that both the decisions on the Medicines Agency and the European Banking Authority went to a tie. Now, this should have been impossible seeing as there was an odd number of countries voting-- there was 27 countries voting. But it happened, actually, in the first instance because Slovakia after only coming fourth in the contest to host the Medicines Agency refused to participate in the last couple of rounds of voting. And in the case of the Banking Authority, one country somehow managed to tick both Paris and Dublin in the final round of voting.
So in the end, this big decision-- which is something that could have been a real political wrangle for the EU-- was taken by the minister from Estonia, which holds the EU rotating presidency, reaching his hand into a large transparent bowl and picking one of two pieces of paper out in each case. So that's how it happened.
Yeah. So that's how he got done. Of course, in reality, there's a lot more to that. Countries have, as I said, been working very hard behind the scenes to build their candidacies. From the beginning, for example, for the Medicines Agency, Amsterdam was seen as one of the frontrunners. We did a story a couple of weeks ago predicting that Milan, Bratislava, Amsterdam, and Copenhagen were the ones who were kind of leading the pack. And that's how it worked out. Those were the top-four placed countries in the vote. And for the European Banking Authority, it looked like it was always going to boil down to being a contest between Paris, Frankfurt, and Dublin. And that's what we've got.
And what does it mean for countries that missed out on the agencies?
For Slovakia, losing was gutting. And of course, also for the ones who made it through to the drawing of lots at the end, it was especially gutting. But Bratislava had been very hotly tipped in the run up to the vote to do very well. And actually, it did OK. I mean, it polled 15 votes in the first round, and it would actually have only needed a few more to make it into the second-round vote, which was a sort of three-way runoff. But the Slovak minister was obviously very disappointed afterwards.
One thing that might well come into play is that Slovakia's finance minister, Peter Kazimir, is a candidate to become the new president of the Eurogroup of euro area finance ministers. So it may be that his candidacy might win some support from other countries potentially who see the need to come up with some sort of alternative for Slovakia because of what's happened.
The reason for that is that there's already an over concentration of agencies in the quote unquote "old EU member states," so the countries that were members of the pre-2004. And there was a sense before the votes in circles in Brussels that there should be a distribution. So you wanted to avoid a situation where both the agencies went to these quote unquote "old member states," and in practice that's what's happened.
And what does it tell us about how the EU 27 are handling Brexit?
Yeah. It tells us quite a lot. There was some scepticism before as to whether the system would work or, to put it another way, whether it be allowed to work. The EU has a history of having really big fights over agencies. There was a very famous one at a summit in Laeken in 2001 where there was a bust-up over whether Finland should be allowed to host the EU's planned Food Standards Agency featuring then Italian Prime Minister Silvio Berlusconi making jokes about Finnish cuisine and things like that. And the whole thing descended into farce.
On other occasions, the EU leaders have had to create new agencies in the middle of the night in order to come up with enough pieces to make a grand bargain. One joke that diplomat mentioned to us earlier on this year was about the impossibility of Donald Tusk, the EU Council president, being able to provide 27 loaves and fishes to the member states with only two agencies to offer.
So there was a big sort of question mark over whether this sort of voting system, which was meant to kind of depoliticise things a bit, whether that would be allowed to work. And it did. And so the key thing is, even though there were complaints from the Slovak minister about the outcome yesterday, no one contests the result. So we do have a system where the EU has navigated something that really the EU's leadership in Brussels and the Brexit negotiators saw as a real potential threat to EU unity. They've managed to navigate that without too many problems.
It's interesting to see how EU is moving ahead with the first tangible signs of Brexit. Thanks very much, Jim. And thanks for our producer in London, Fiona Symon.