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Leaked UK memo accuses Paris of wanting to sink City of London

© Leon Neal, AFP file picture | The City of London financial district, including the Gherkin (right) and the 'Walkie Talkie' (front) towers.

Text by FRANCE 24

Latest update : 2017-07-17

France is pushing for a hard Brexit in a bid to weaken the City of London, the British finance sector's EU frontman warned in a leaked report published on Sunday.

"They are crystal clear about their underlying objective: the weakening of Britain, the ongoing degradation of the City of London," Jeremy Browne, a former government minister who is now the City's Brexit envoy, said in a memo.

The leaked report, published by the Mail on Sunday tabloid, was written as a summary to ministers of a trip made by Browne to France in early July.

"The meeting with the French Central Bank was the worst I have had anywhere in the EU. They are in favour of the hardest Brexit. They want disruption," he said.

Browne acknowledged there may be political benefits to France of playing "bad cop" in the negotiations on Britain's withdrawal from the European Union, which began last month and resumed in Brussels on Monday.

But "we should nevertheless have our eyes open that France sees Britain and the City of London as adversaries, not partners".

France denies aggressive tone

According to Browne, this approach was not confined to a few officials, but was a "whole-of-France collective endeavour, made both more giddy and more assertive by the election of (Emmanuel) Macron" as president in May”. Aside from his meeting with the French Central Bank, he did not specify which other officials he had spoken with.

Browne added that "every country, not unreasonably, is alive to the opportunities that Brexit provides, but the French go further".

He said they are "seemingly happy to see outcomes detrimental to the City of London even if Paris is not the beneficiary".

The French Central Bank, La Banque de France, on Monday denied that the tone during the meeting had been aggressive, and said that there had been no controversial intentions, such as Browne described in the memo.

“We reminded them of our position that Great Britain has unfortunately chosen a ‘hard Brexit’, the City of London therefore loses its European passport and that some financial activities connected to the euro will relocate to the continent. It’s a question of consistency,” a spokesperson, who asked to remain anonymous, told FRANCE 24 in an emailed response.

Many cities in running to replace London

Paris is competing with Amsterdam, Dublin, Frankfurt, Madrid and Luxembourg for an expected shift in finance jobs out of London as a result of Brexit.

With Britain at risk of losing the "passporting rights" financial firms use to deal with clients in the rest of the bloc, employees in direct contact with customers may need to be based on EU territory in future.

The day after Britain voted to leave the EU in June last year, Valérie Pécresse, the head of the Paris regional government, sent out hand-signed letters to 4,000 small, medium and large international enterprises in London, underscoring the benefits of moving their businesses to Paris.

And in October, Paris’s financial centre La Défense launched the PR-campaign “Tired of the fog? Try the frogs” aimed at attracting companies across the Channel. In November, the city of Paris, the Paris regional government and the French chamber of commerce also set up a so-called “Brexit cell”, dubbed Choose Paris Region, a team exclusively dedicated to responding to queries -- many of them anonymous -- from companies considering a potential move from London to Paris in the light of Brexit.

Earlier this month, French Prime Minister Édouard Philippe laid out a raft of measures aimed at boosting Paris's attractiveness, including eliminating the top income tax bracket.

Browne, who was an MP for the pro-European Liberal Democrats until 2015, served as a junior foreign office minister in former prime minister David Cameron's coalition government.

He was appointed special representative to the EU by the City of London Corporation, which represents the financial sector, in September 2015.

(FRANCE 24 with AFP)

Date created : 2017-07-17

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