In the last few weeks following Brexit, several European cities have scrambled to tempt away London bankers including Paris, Amsterdam and Dublin, amongst others.
In fact, less than two weeks after the UK public voted to leave the European Union in July, Finance Magnates reported that Berlin was already looking to steal London’s crown as Europe’s centre of fintech.
Today, Bloomberg reported that another German city, this time Frankfurt, has launched its own Brexit pitch: to make it easy to fire bankers.
Hesse, the German state regarded as country’s financial hub, is looking at ways of loosening the employment law which would enable banks to easily fire highly paid employees in a downturn, something that banks can already do in the UK.
The move could make Frankfurt more attractive to companies considering moving away from London.
Although it is likely to take a few years before Britain actually leaves the European Union, the eventual Brexit could threaten the ability of the City’s financial sector to do business throughout the bloc.
In Bloomberg’s report, Uwe Becker, Frankfurt’s deputy mayor and treasurerת said: “We’ve got to get ahead of the situation on Brexit before other cities like Paris and Milan do.”
Amid Ongoing Uncertainty, Is the Crypto Industry Stepping Up? Go to article >>
Current German employment law makes the dismissal of top executives difficult and many CEOs and Brexit teams are said to be afraid of German employment laws and contracts.
Extending the more relaxed rules to all top money makers with annual salaries of over 300,000 euros ($339,000) has therefore been suggested.
The Association of Foreign Banks in Frankfurt has also floated the idea of a three to five year ‘grace period’ during which jobs relocated from London would be governed by British rules.
There is a catch – any change would need to take place at the national level and Germany’s Labour Ministry, which is responsible for employment law, is run by the Social Democrats, who have close ties to unions.
In the meantime, Hesse is focusing on its list of advantages that Frankfurt has over rival cities such as a competitive tax structure and strength of the region’s economy.
According to Frankfurt officials, the goal is not to steal jobs from London, but rather to ensure that any jobs that end up leaving the City end up in Frankfurt rather than one of its continental rivals.
Frankfurt has stressed that it is “a sensible, business-friendly place built around finance.”
Making a comparison with Paris, for example, “the city of light, the city of love, and a city of lunch”, Hubertus Väth, head of the Frankfurt Main Finance trade group, added: “And in finance, lunch is for losers.”