Cities across Europe jockey to woo businesses from London

The skyline of the City of London is pictured on the horizon as people relax in Greenwich park in south-east London on June 26.
The skyline of the City of London is pictured on the horizon as people relax in Greenwich park in south-east London on June 26. PHOTO: AFP

LONDON • Within hours of Britain's vote to leave the European Union, it started.

A Lithuanian lawmaker wrote to the chief executive of HSBC, trying to court the bank. A website promoting Frankfurt, Germany, as an attractive location to invest in went live. A Berlin start-up published an online guide for anyone looking to move to the German capital.

Britons had only just begun to digest the results of the referendum when cities and companies across Europe leapt into action, jockeying to woo businesses, entrepreneurs and investment from London.

Much remains up in the air. Britain has not even officially filed to leave, and there will be painful negotiations on matters including trade and whether people from EU nations will have the freedom to work in Britain.

Despite the high levels of uncertainty, others in Europe are looking to gain from Britain's pain.

Across the continent, officials are vocally trying to entice financial services firms, technology start-ups and others to forgo the British capital for cities like Paris, Luxembourg, Frankfurt and even the relatively tiny Lithuanian capital, Vilnius. They warn that businesses will suffer if they stay in a Britain that no longer has unfettered access to the EU and its hundreds of millions of potential customers.

Few cities were as ready as Frankfurt. The city's website was up within hours of the voting results, extolling the charms of the region surrounding Frankfurt. London investment bankers who logged into the social networking sites LinkedIn and Twitter were greeted with advertisements with the message: "Welcome to Frankfurt, what can we do for you?" A telephone hotline was set up to answer questions about finding office space or navigating red tape.

Several companies, including banks like HSBC and JPMorgan Chase and the telecommunications giant Vodafone, have said they will consider moving at least a few jobs to the continent.

"A 2 per cent loss for London is a 20 per cent gain for Frankfurt," said Mr Hubertus Vaeth, managing director of Frankfurt Main Finance, a coalition of businesses and local government organisations behind the campaign.

When it comes to the financial services industry, several cities have rolled out the red carpet to woo London-based companies.

Before the referendum, local and regional government officials held an event in Paris at the offices of Euronext, the stock market operator. Called "Welcome to Europe!", it encouraged financial services companies to consider the French capital as an alternative.

Ms Valerie Pecresse, president of the region that surrounds Paris, has extolled the city's virtues, noting the opening of new bilingual schools as well as its quality of life and available office space.

"When Britain goes out, a lot of firms will have to relocate in Europe," Ms Pecresse said.

Along with the large cities, smaller financial centres - in Belgium, Luxembourg and the Netherlands - are getting involved. Even Lithuania, a country not typically noted as a hub for business in Europe, much less high finance, is involved.

On the day the referendum results were announced, Mr Antanas Guoga, a Lithuanian member of the European Parliament, wrote to several financial institutions with large London headcounts, suggesting they move some of their European operations to Vilnius, which has a population of just over 500,000.

Despite the overtures from elsewhere, officials in London still believe they will retain most of the business and finance.

"There will be no mass exit of banks and financial institutions from the Square Mile," said Mr Mark Boleat, policy chairman of the City of London Corp, referring to London's financial centre.

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on July 02, 2016, with the headline 'Cities across Europe jockey to woo businesses from London'. Print Edition | Subscribe