BRUSSELS • Critical agencies that oversee Europe's banks and pharmaceutical sector will move from London to cities on the continent, political leaders in Brussels decided on Monday, potentially ominous harbingers of how Britain's impending exit from the European Union could diminish the country's economic clout.
The European Medicines Agency will move to Amsterdam, while the European Banking Authority is set to relocate to Paris.
Representatives of EU member states voted by secret ballot. In the case of the medicines agency, Amsterdam and Milan ended up tied, with the winner chosen by drawing lots, an EU spokesman said. Paris, meanwhile, beat out Dublin for the banking authority.
The departure of the European Medicines Agency, Europe's equivalent of the Food and Drug Administration in the United States, is a blow to the prestige of Britain's pharmaceutical industry, a vital pillar of the economy and an example of the country's bona fides in scientific research and development.
The European Banking Authority has strong symbolic value among cities jostling to become continental Europe's financial capital. Its departure serves as a warning of the consequences of Brexit for London, currently the banking capital of Europe, and illustrates the fierce competition from other capitals for the spoils.
"There is no upside for the City of London" from Brexit, said Mr Nicolas Veron, a senior fellow at Bruegel, a research organisation in Brussels. "It will lose business, not gain."
From Britain's point of view, the European Medicines Agency is the larger of the two losses in tangible terms, as it has around 890 staff. It oversees the approval of drugs for use across Europe, has an annual budget of more than US$300 million (S$407 million) and generates significant additional revenue for London. For example, on most weekdays, its visiting experts fill 350 hotel rooms in the city.
Its departure also underscores continuing questions about how British pharmaceutical companies will be regulated after the country's withdrawal from the bloc, known as Brexit, a shift scheduled for March 2019. Mr Charles Tannock, a Conservative Party lawmaker in the European Parliament, described the relocation of the medicines agency on Twitter as a "huge loss to UK pharma".