France’s new president wants to steal all Britain’s bankers
If you saw the Sun or the London Evening Standard last night, you’ll have seen that it looks like Brits are seriously worried about Emmanuel Macron, the new leader of France.
One of the biggest talking points around Brexit was the fact that most of the banks would probably move out of the UK if it left the EU. Why? Because of a rule called called ‘passporting’, which says that businesses can set up shop within what’s called the ‘European Economic Area’ and trade across all of Europe without needing individual permits in each country.
If Britain is out, it can’t be part of the ‘passporting’ crew anymore – which would make having headquarters in London totally inconvenient for a business (or a bank) if they wanted to work with businesses in other European countries, which banks do.
Enter Macron. France’s new president is super pro-Europe, loves the idea of making trade between countries as simple as possible, and used to be an investment banker himself. So he’s pretty excited about the idea of getting all the banks to come to Paris. France already launched a campaign last year to get things rolling, saying “Tired of the fog? Try the frogs!” (Not the most appealing slogan, but it’s the thought that counts…)
He thinks it could bring as many as 30,000 jobs into France – not just the bankers themselves, but the IT specialists, the accountants, the lawyers… not to mention all the restaurants and clubs whose profit margins are likely to do pretty well out of a new customer base with six to eight figure salaries.
But hold on a second. Didn’t we all really hate bankers a few years ago? There was that whole letting-the-whole-financial-sector-go-to-sh*t thing in 2008, and since then economists have been wondering how much good the financial sector really does for the economy. So why does Macron want the bankers in France so badly?
The jury is basically still out among economists over whether having lots of in your country is a good thing for the economy or not. Some say it is, because they generate lots of money – a government report last year said that banks contributed £124.4 billion to the UK, not to mention paying £24 billion in tax.
But it’s so, so difficult to actually know where that money goes, and whether it was invested in quick-win, risky businesses, or sustainable, long-term ones. Sure, bankers have a lot of cash, but whether that cash is actually flowing into the shops, households, and wallets of the everyday person rather than circling around the financial sector is really hard to prove.
And, as we learnt the hard way in 2008, they don’t always make the best decisions about where to put their money. All this makes measuring the impact of the financial sector is one of the hardest jobs economists have.
If you’re confused, that’s you and 99 per cent of the population (including lots of economists.) How exactly banks and money work is still a mystery even to those who say they’re ‘experts’ on all things economics. We just don’t know yet – or at least, we haven’t found an explanation that everyone agrees on.
So whether or not the Brits should be too upset about Macron wanting to bring all the bankers over, and whether he should really want them there, isn’t actually as clear as it might seem.
But what we do know, and what we’ve always known, is that bankers like working in environments with as few rules and regulations as possible – in other words, they don’t like spending their time negotiating individual permits with individual countries. (They also like going to places where they don’t need to pay too much corporation tax, like Dublin or Switzerland.) So the UK can’t really be too surprised that the banks wants to leave Britain if Brexit goes ahead.
And to be fair, if we were the bankers, we’d probably pick France over London. Less rain, more cheese...