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Abu Dhabi, UAEFriday 14 December 2018

City of Light takes on City of London as Brexit looms

Paris on charm offensive to lure London financial companies

The Shard tower in London. Courtesy : Eric Smerling
The Shard tower in London. Courtesy : Eric Smerling

London’s Shard, the eye-catching 95-storey tower, reportedly struggles to sell luxury flats priced at up to £50 million (Dh2.4bn).

But with its commanding views of a capital learning to live with Brexit, it provided an ideal and almost mischievous setting for the start of Paris’s charm offensive directed at finance companies pondering the immediate future.

France’s left-of-centre daily newspaper Libération is no friend of capitalism but it reported whimsically on a conference held high in the Shard earlier this year, before France voted the socialists out and the centrist Emmanuel Macron and his fledgling La Republique En Marche (Forward the Republic) party into presidential and parliamentary power.

The French hosts at first avoided clichés about the cosy bistros and beautiful museums of Paris, instead focusing on France as a business-friendly environment.

The unspoken assurance was that the era of François Hollande, and his disdain for money (“My real enemy is the world of finance,” he told a rally before his ill-fated presidency began in 2012), was over.

Ultimately, said Libération, the clichés returned as Valérie Pécresse, the centre-right president of the Paris region’s council, echoed another aspect of the French capital’s charms. “When did you last take your partner on a romantic weekend to Frankfurt?” she asked.

The electoral triumphs of the pro-finance Mr Macron, who made his fortune as a Rothschild investment banker, has intensified efforts to woo companies from London.

At this month’s Paris Europlace, a forum promoting the city as a financial marketplace, Mr Macron’s prime minister, Edouard Philippe, said his message was “clear and simple”: the French government was determined to do all it could, following Brexit, to make Paris the new No 1 among European financial centres.

The business magazine Challenges pointed out that the city had much ground to cover since it lagged behind not only Frankfurt but Dublin and Luxembourg in attracting business relocating because of Brexit.

Mr Philippe could not resist boasting of the “incomparable quality of life” Paris offered. But aware that an audience of hard-headed decision-makers needed more substance, he outlined plans for significant reforms of income and corporate taxation and employer-friendly changes to labour law.

"All these measures to increase attractiveness will serve everyone, since they will create jobs and wealth," he said.

Mr Philippe began his speech in English but soon returned to his native tongue, perhaps illustrating a key advantage held not only by Dublin but also Frankfurt and Luxembourg. The French, like the English, are poor at learning other languages; of 11 presidential candidates, only Mr Macron spoke English fluently.

And for Paris’ seduction technique to prevail, other lingering doubts – notably concerning Mr Macron’s ability to succeed where predecessors have failed and face down belligerent trade unions – must be overcome.

The new regime’s promises of reform must quickly translate into action.

As Challenges noted, the Paris Europlace guests included Jamie Dixon, chairman, president and chief executive of the top United States bank JP Morgan Chase, which has already talked of transfers to Frankfurt.

“Paris is a beautiful city, and I love your new president,” he said. “But that's not what counts.”

Colin Randall