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ECONOMY

Paris wins bid to host EU banking agency post-Brexit

Paris on Monday won the right to host the European Banking Authority after it leaves London in the wake of Brexit, the bloc's presidency said.

Published: 20 November 2017 22:11 CET
Paris wins bid to host EU banking agency post-Brexit
Photo: AFP/DcnH/Flickr
The French capital beat Dublin in a tie-break after three rounds of voting by EU ministers failed to produce an outright winner.
 
French President Emmanuel Macron welcomed the choice of Paris as the new home of the European Banking Authority (EBA) following Britain's withdrawal from the EU in March 2019.
 
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Photo: AFP

Macron tweeted (see below): “Paris will welcome the European Banking Authority! It is recognition of the attractiveness and the European commitment to France. Happy and proud for our country.”
 
Paris is doing all it can to benefit from the uncertainty around Brexit and in September announced plans to cut taxes on high earning finance sector jobs as part of efforts to make Paris more attractive for firms shifting operations out of London.
 
Earlier this month  the president of the great Paris region of Île-de-France Valerie Pecresse announced that it has already been promised 2,500 jobs to be switched from Britain as a result of Brexit.

“#Brexit: 2,500 jobs already announced for Ile-de-France, with a target of 10,000 by 2019,” Valerie Pecresse tweeted on a visit to London to meet representatives of 70 internationally-focused companies based in London.

Pecresse's figure concerns large financial companies, so the total could be closer to 3,500 and 4,000 posts once small businesses are taken into account, Arnaud de Bresson, chief executive of financial lobby group Paris Europlace and who was part of the visit, told AFP by telephone.

READ ALSO: Brexit and Macron: Why we're leaving London for Paris

Brexit and Macron: Why the time was right to quit London for Paris

Large financial institutions, including British bank HSBC, Swiss peer UBS and US giants JPMorgan and Morgan Stanley, have confirmed plans to move some activities to Paris, as well as to Amsterdam, Dublin and Frankfurt, as a result of Britain's departure from the European Union.

The Bank of England said this month that 10,000 UK financial services jobs could move abroad on the first day of Brexit, after warnings of up to 75,000 relocations in total.

Britain is set to leave the bloc in March 2019, but remains locked in tough exit negotiations with the EU.

 

ECONOMY

France and Italy face spending rebuke from EU

The European Union was expected to issue warnings to France, Italy and several other governments over excessive spending after new budget rules came into force this year.

Published: 19 June 2024 08:59 CEST
France and Italy face spending rebuke from EU

The rebuke comes at a particularly difficult moment for France, where both the far left and far right are piling up spending promises ahead of snap polls triggered by President Emmanuel Macron’s crushing EU election defeat.

This will be the first time Brussels has reprimanded nations since the EU suspended the rules because of the 2020 Covid pandemic and the energy crisis triggered by Russia’s invasion of Ukraine, as states propped up businesses and households with public money.

The EU spent two years during the suspension overhauling budget rules to make them more workable and give greater leeway for investment in critical areas, like defence.

But two sacred goals remain: a state’s debt must not go higher than 60 percent of national output, with a public deficit – the shortfall between government revenue and spending – of no more than three percent.

The European Commission will publish assessments of the 27 EU states’ budgets and economies on Wednesday, and is expected to point out that some 10 countries including Belgium, France and Italy, have deficits higher than three percent.

The EU’s executive arm has threatened to launch excessive deficit procedures, which kickstart a process forcing a debt-overloaded country to negotiate a plan with Brussels to get back on track.

Such a move would need approval by EU finance ministers in July.

Countries failing to remedy the situation can in theory be hit with fines of 0.1 percent of gross domestic product (GDP) a year, until action is taken to address the violation.

In practice, though, the commission has never gone as far as levying fines, fearing it could trigger unintended political consequences and hurt a state’s economy.

The EU countries with the highest deficit-to-GDP ratios last year were Italy (7.4 percent), Hungary (6.7 percent), Romania (6.6 percent), France (5.5 percent) and Poland (5.1 percent).

They may face the excessive deficit procedures, alongside Slovakia, Malta and Belgium, which also have deficits above three percent, according to Andreas Eisl, expert at the Jacques Delors Institute.

The picture is complicated for three other countries, Eisl said. Spain and the Czech Republic exceeded the three percent limit in 2023 but should be back in line this year.

Meanwhile, Estonia’s deficit-to-GDP ratio is above three percent – but its debt is around 20 percent of GDP, significantly below the 60 percent limit.

The commission will look at the states’ data in 2023 but “will also take into account the developments expected for 2024 and beyond”, the expert told AFP.

Member states must send their multi-annual spending plans by October for the EU to scrutinise and the commission will then publish its recommendations in November.

Under the new rules, countries with an excessive deficit must reduce it by 0.5 points each year, which would require a massive undertaking at a moment when states need to pour money into the green and digital transition, as well as defence.

Adopted in 1997 ahead of the arrival of the single currency in 1999, the rules known as the Stability and Growth Pact seek to prevent lax budgetary policies, a concern of Germany, by setting the strict goal of balanced accounts.

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