France Announces Plan To Take Advantage Of The Post-Brexit Situation
Following the decision of Britain to exit the European Union, there has been a lot of speculation concerning the state of banks and financial institutions in London. This uncertainty has necessitated other cities in Europe to take advantage of the benefits of the post-Brexit situation. Although Paris has been moving slowly in comparison with other cities such as Dublin and Frankfurt, the state government has announced a plan dubbed “Welcome back to Europe”, in an attempt to attract more investors and financial institutions.
According to Emmanuel Macron, the current President of France, and former banker, there is the need to loosen regulations and cut taxes related to the banking sector. The reason for this is that after the conclusion of Brexit, banks based in London will have to relocate to other cities in the European Union so as to continue their operations. This is because the banks require “passporting rights” so as to remain active within European countries; a right Britain may lose after Brexit. Therefore, it becomes necessary for France to change the popular perception that it has an unfavorable economic atmosphere for international businesses.
Edouard Philippe, the Prime Minister of France forwards that the current situation needs to change in order to reap the benefits of Brexit. He says that the government is ready to implement initiatives to abolish disincentives and policies that discourage foreign investment, especially in the banking sector. Such initiatives include the elimination of taxes on specific financial transactions, as well as the top payroll tax. As opposed to other states in the European Union, France charges businesses a tax on every salaried individual in the banking, healthcare, and real estate sectors. This is very detrimental to the robust possibilities that could be available after Brexit.
France is also set to disregard the bonuses associated with severance pay and the early termination of perceived risk-taking jobs such as stock arbitration. This is because such bonuses make laying them off very expensive. Aside from the financial and tax barriers, there are also legal and linguistic impediments to business relocation. This is because most international obligations and contract are enacted through British law, and written in English. According to Edouard Philippe, necessary steps have been taken to institute an international committee that will handle financial affairs in English.
However, it is important to note that it is not only these incentives that will attract financial investors to Paris, from its main competitors including Dublin and Frankfurt. The general perception of France’s inflexible labor laws, cumbersome bureaucracy, and vocal population also play a significant role. President Emmanuel Macron ascertains that his government will continue to implement measures that promote foreign investment and business relocation in France.
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