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Brexit bank relocations to Germany expected to create 2,500 jobs

Germany is the most popular EU destination for banks leaving London following Brexit, with financial institutions expected to move €675 billion in assets and create 2,500 jobs, the Bundesbank said Monday.

Published: 2 November 2020 17:17 CET

Brexit bank relocations to Germany expected to create 2,500 jobs

Photo: DPA

The German central bank expects lenders to transfer €397 billion more than the €278 billion it has already moved from Britain post-Brexit, it said in a study, as negotiations intensify surrounding the conditions for the UK's new relationship with the European Union.

The European Central Bank estimated in August 2019 that €1.3 trillion in assets would be transferred to the eurozone from Britain ahead of Brexit.

READ ALSO: How post-Brexit bank changes could affect British people in Germany

Britain left the 27-nation bloc at the end of January, but is currently negotiating its future relationship with the EU amid a transition period that ends on December 31st.

The spectre of a “cliff-edge” no-deal Brexit, which would add more obstacles to cross-border business, has risen in recent weeks as negotiations stalled over fair-trade rules and fishing rights, with EU Commission chief Ursula von der Leyen saying last week that talks were in a “critical phase”.

The Bundesbank study confirms banks' preference for Germany as a base for operations away from London, estimating a total of €675 billion in relocated assets.

By comparison, around €150 billion of assets will be moved to France by the end of the year, France's central bank governor said.

Sixty-four financial institutions have applied for banking licences in Germany, with 40 so far having been approved, and the remainder pending.

Financial institutions moving operations out of the City of London should boost bank workforces in Germany by as many as 2,500 positions.

US bank JP Morgan said in September it would shift some €200 billion from the square mile to Frankfurt, which would make it one of Germany's biggest lenders by assets.

The Bundesbank also said the financial sector was generally well prepared for Brexit, echoing ECB supervisory board chair Andrea Enria, who said that
banks are “now ready to take the hit, to some extent.”

READ ALSO: EU students turn to Germany as a top study destination in light of Brexit

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OPINION: Pre-Brexit Brits in Europe should be given EU long-term residency

With all the talk about the EU long-term residency permit and the proposed improvements there is no mention that UK citizens who are Withdrawal Agreement “beneficiaries” are currently being left out in the cold.

The European Commission has stated that we can hold multiple statuses including the EU long-term permit (Under a little-known EU law, third-country nationals can in theory acquire EU-wide long-term resident status if they have lived ‘legally’ in an EU country for at least five years) but in reality it is just not happening.

This effectively leaves Brits locked into their host countries while other third country nationals can enjoy some mobility rights. As yet, in Italy, it is literally a question of the computer saying no if someone tries to apply.

The lack of access to the EU long-term permit to pre-Brexit Brits is an EU-wide issue and has been flagged up to the European Commission but progress is very slow.

READ ALSO: EU government settle on rules for how non-EU citizens could move around Europe

My guess is that few UK nationals who already have permanent residency status under the Withdrawal Agreement are even aware of the extra mobility rights they could have with the EU long-term residency permit – or do not even realise they are two different things.

Perhaps there won’t be very large numbers clamouring for it but it is nothing short of discrimination not to make it accessible to British people who’ve built their lives in the EU.

They may have lost their status as EU citizens but nothing has changed concerning the contributions they make, both economically and socially.

An example of how Withdrawal Agreement Brits in Italy are losing out

My son, who has lived almost his whole life here, wanted to study in the Netherlands to improve his employment prospects.

Dutch universities grant home fees rather than international fees to holders of an EU long-term permit. The difference in fees for a Master’s, for example, is an eye-watering €18,000. He went through the application process, collecting the requisite documents, making the payments and waited many months for an appointment at the “questura”, (local immigration office).

On the day, it took some persuading before they agreed he should be able to apply but then the whole thing was stymied because the national computer system would not accept a UK national. I am in no doubt, incidentally, that had he been successful he would have had to hand in his WA “carta di soggiorno”.

This was back in February 2022 and nothing has budged since then. In the meantime, it is a question of pay up or give up for any students in the same boat as my son. There is, in fact, a very high take up of the EU long-term permit in Italy so my son’s non-EU contemporaries do not face this barrier.

Long-term permit: The EU’s plan to make freedom of movement easier for non- EU nationals

Completing his studies was stalled by a year until finally his Italian citizenship came through after waiting over 5 years. I also meet working adults in Italy with the EU long-term permit who use it for work purposes, such as in Belgium and Germany, and for family reunification.

Withdrawal agreement card should double up as EU long-term residency permit

A statement that Withdrawal Agreement beneficiaries should be able to hold multiple statuses is not that easy to find. You have to scroll quite far down the page on the European Commission’s website to find a link to an explanatory document. It has been languishing there since March 2022 but so far not proved very useful.

It has been pointed out to the Commission that the document needs to be multilingual not just in English and “branded” as an official communication from the Commission so it can be used as a stand-alone. But having an official document you can wave at the immigration authorities is going to get you nowhere if Member State governments haven’t acknowledged that WA beneficiaries can hold multiple statuses and issue clear guidance and make sure systems are modified accordingly.

I can appreciate this is no mean feat in countries where they do not usually allow multiple statuses or, even if they do, issue more than one residency card. Of course, other statuses we should be able to hold are not confined to EU long-term residency, they should include the EU Blue Card, dual nationality, family member of an EU citizen…

Personally, I do think people should be up in arms about this. The UK and EU negotiated an agreement which not only removed our freedom of movement as EU citizens, it also failed to automatically give us equal mobility rights to other third country nationals. We are now neither one thing nor the other.

It would seem the only favour the Withdrawal Agreement did us was we didn’t have to go out and come back in again! Brits who follow us, fortunate enough to get a visa, may well pip us at the post being able to apply for EU long-term residency as clearly defined non-EU citizens.

I have been bringing this issue to the attention of the embassy in Rome, FCDO and the European Commission for three years now. I hope we will see some movement soon.

Finally, there should be no dragging of heels assuming we will all take citizenship of our host countries. Actually, we shouldn’t have to, my son was fortunate, even though it took a long time. Others may not meet the requirements or wish to give up their UK citizenship in countries which do not permit dual nationality.

Bureaucratic challenges may seem almost insurmountable but why not simply allow our Withdrawal Agreement permanent card to double up as the EU long-term residency permit.

Clarissa Killwick,

Since 2016, Clarissa has been a citizens’ rights campaigner and advocate with the pan-European group, Brexpats – Hear Our Voice.
She is co-founder and co-admin of the FB group in Italy, Beyond Brexit – UK citizens in Italy.

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