While London Rues Brexit, Paris Says 'Merci'

[marmar]

(Bloomberg) When the UK left the European Union in January 2020, it marked the occasion with a commemorative 50 pence coin and a Whitehall light show. The mood today is closer to funereal than celebratory. A regretful population is mainly seeing worse inflation, declining public services and a potential recession — none of which was promoted on the side of the campaign bus. London Mayor Sadiq Khan is among the few politicians to break “the vow of silence” and say Brexit isn’t working; the Bank of England also sounds gloomy.

The rest of Europe is no economic picnic either, of course. Yet Brexit’s anniversary feels rather different from the continent, where some gains are being eked out to offset the pain of losing a big chunk of EU economic, trade and military clout. Just a few days after Khan’s warning that the City of London was being hit by a “loss of trade and talent” because of Brexit, London-based hedge fund Chenavari — founded by a French banker — cut the ribbon on its new Paris offices.

Speaking from those new digs close to the Arc de Triomphe, Chenavari’s Paris head Stéphane Parlebas tells me this expansion is not down to the whip-cracking of regulators. Brexit and Covid have made it more attractive to be closer to local institutional investors, he says. And UK political messes like the “Trussonomics” budget debacle, which ushered in the country’s fifth prime minister in six years, haven’t helped. “The market reaction showed the UK’s error was imagining that Brexit could unleash a European `tiger,’” he says, echoing the economic growth miracles associated with globalization in Asia or Ireland.

The leaking of jobs and talent from London is picking up pace, in other words. Data for 2021 from the European Banking Authority shows a jump in the number of top-paid finance pros in the EU, part of over 7,000 post-Brexit job moves tracked by EY. In Germany, where JPMorgan Chase & Co. is planning a new digital bank, more top bankers have been added in six years than in the UK. Crucially, non-banking activities are also following suit: Millennium Management and Citadel LP are among hedge funds expanding in Paris. The end of free movement has kept more young talented workers on the continent, while new research estimates it has led to a net loss of 330,000 workers in the UK as of September. .............................(more)

https://www.bloomberg.com/opinion/articles/2023-02-03/while-london-rues-brexit-paris-says-merci?srnd=premium&leadSource=uverify%20wall