The sweeping victory of Emmanuel Macron in France opens the way for a radical shake-up of the country's antiquated labour code and punitive tax regime, greatly boosting the hopes of Paris as it tries to capture valuable business from the City of London.

The French financial industry is seizing on the 'Macron effect' to step up its charm offensive in the Square Mile and Canary Wharf, convinced that the election of an ex-Rothschild banker in France has combined with a hard Brexit to create a perfect opportunity. 

Officials have been criss-crosing London over recent days meeting sovereign wealth funds and bankers from the US, Japan, China, and other countries, selling the promise of a reformist revolution in Paris. What is faintly ominous for London is that they are pulling forward the timetable for what they believe to be the expected exodus. 

"We think that the process will now accelerate because it looks like a hard Brexit, and we think it will happen within months," said Arnaud de Bresson, head of finance federation Paris Europlace.

"Investment banks and asset managers now understand that they will have to move part of their euro activities, which was not the case in our earlier meetings when it was still business as usual," he told the Daily Telegraph.

"We expect them to move some of capital market as well as fund management business to Paris in phases. We think we can gain 20,000 jobs, 10,000 directly. This is quite reasonable," he said, though he was coy about names. City advocates say such claims are wishful thinking.

David Fuller's view

I think Emmanuel Macron is an extremely impressive and capable figure.  I am glad he won the Presidency because he is far more entrepreneurial than any of his rivals.  This can only be good for France.

How might this affect the City in the light of the hard Brexit which we are likely to see?

Businesses will generally move to where they have the best prospects.  Inevitably, I think we will see some drift from the City of London to Paris. However, one of Macron’s biggest problems is that he will not have a majority government. Moreover, Paris does not have anything like the highly developed financial structure that we see in London.  The talent pool in Paris will remain smaller and many of the costs will be higher. 

The City of London’s overall financial business may contract temporarily. However, five years on from Brexit it is likely to be much larger. London will have a much bigger representation from Asia and the former Commonwealth countries.  Previously, these businesses were largely excluded by the EU’s protectionist closed shop.

Here is a PDF of AEP’s article.