French President Emmanuel Macron waits for a guest at the Elysee Palace in Paris, France, June 28, 2017. Reuters photo Related News
French President Emmanuel Macron’s newly unveiled labour reform will boost Paris as a destination for banking jobs post-Brexit by making its labour market more flexible than Germany’s, the head of lobbying group Paris Europlace said on Thursday. Britain’s decision to leave the European Union has opened up fierce competition among financial centres elsewhere in the bloc, including Paris, Frankfurt and Dublin, to attract banks and other financial companies seeking to secure continued access to the single market once Britain leaves.
Some bankers have been sceptical that France could attract much of the UK financial industry, with rigid labour rules and a frequently changing tax system seen as major deterrents. But Macron’s government unveiled, less than four months after his election, a reform which includes caps on payouts for dismissals adjudged unfair and greater freedom to hire and fire, as well more flexibility to adapt working hours.
“Mission accomplished,” Arnaud de Bresson, the head of the group in charge of promoting Paris as a financial market centre, told Reuters in an interview. “All our international partners can now see that the French president keeps his promises, in terms of ability to deliver and speed of execution, which is a strong signal,” he said.
For decades, governments of the left and right have tried to reform France’s strict labour rules, but have always diluted them in the face of street protests. De Bresson said that despite the introduction of measures resisted by unions before, Macron’s strategy to hold months of talks with them over the summer had convinced most of them to hold off from calling for protests.
“There was a spirit of consensus, of dialogue, even though there will certainly be some reactions. That’s new in France,” he said. However, the reforms come at a time when the 39-year-old president has suffered a sharp drop in popularity ratings.
The hardline CGT union has called for demonstrations against the new law on Sept. 12 but, crucially for the government, was not followed by France’s two other main unions, the CFDT and FO. France now had nothing to envy Germany, which implemented similar reforms in 2004-2005, in terms of labour flexibility, De Bresson said.
“Germany is a country with some advantages in terms of social dialogue, but it also has red tape in terms of labour rules and dismissal procedures, in that respect France is in a better situation today,” De Bresson said.
The labour reform comes after the French government also confirmed plans to gradually cut its corporate tax rate to 25 percent by 2022. Among the big international banks, only HSBC has so far said it would shift a large number of jobs to Paris with plans to move 1,000 posts if Britain opts for a hard Brexit.
Among French banks, Societe Generale told Reuters it could move up to 400 investment banking jobs to Paris out of the 2,000 it currently has in London. JPMorgan Chase & Co Chief Executive Jamie Dimon said last month in a visit to Paris that the new government had made “enormous leeway”.
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