Over the last century, London has established herself as Europe’s financial capital by ensuring and developing economic certainty, legal stability, political stability, and globalization. These four major achievements have placed London far above other European cities to attract business and investments and establish London as Europe’s Financial Capital. Which role will London play after Brexit? Which European city will replace London as Europe´s financial capital?
Brexit creates economic uncertainty, legal instability, and political instability as Britain implements her new constitution. This instability and further challenges like Euro-clearing and pass-porting, highlight the effects of Brexit on London and her ability to remain as Europe’s financial center. Europe needs a new city as its financial capital to replace London, which ceases to be a European city
Britain has further failed to reach a Trade Agreement with the EU, provoking a hard Brexit ahead of the deadline for a deal. The remaining European Union member states must then find a suitable replacement for London to ensure the stability of the EU as a global financial marketplace.
Here we take a look at 10 European states that can replace London as Europe’s Financial Capital:
1. Paris, France.
Paris could rank first in replacing London given her reputation as a business center, accessibility to other global markets -bolstered by her technological advancement, multicultural environment, infrastructure in telecommunications, and transportation. The French Government has also ensured a favorable climate for business. The added availability of qualified staff with efficient spoken languages places Paris on the radar of any business looking to establish itself away from London. Similar to Financial Times, we can pose the question: Are Brexit London´s loss and Paris´s gain?
The major issues that remain in Paris are the high costs of office space and staff and the pollution levels in the city. Working and living in Paris will challenge you to learn the French language and culture, but still have a chance to connect with the English-speaking global community.
2. Frankfurt am Main, Germany.
Frankfurt, the German financial city ranks favorably given her reputation as the financial heart within Europe, a business center, access to global financial markets bolstered by infrastructure development in telecommunication and external transportation systems (FRAPORT). Most international air travel through Europe passes through Europe’s largest Frankfurt airport. Frankfurt also hosts the European Central Bank (ECB) as the center of Europe´s monetary policy and the center of German´s monetary policy with the German Central Bank. As one of the most international cities in Germany, Frankfurt offers ample availability of qualified staff and office space, and efficiency in languages spoken. However, the cost of staff remains high while the quality of life of employees can be better in the city.
A study carried out by the Ifo Institute in 2018 aimed at quantifying the medium and long-term implications (quantitative effects) of Brexit for the economic and employment development of the German state of Hesse (Ifo, 2018). Their quantitative effects were estimated using the New Quantitative Trade Theory Models (NQTT-Ms), which is a modern CGE (Computational General Equilibrium) model, newly calibrated to quantify the state-specific effects of the State of Hesse. The findings of the Ifo Institute Study tell an optimistic story. The Ifo Insitute found that the metropolitan city of Frankfurt should expect a lower negative impact at the state level. In “soft Brexit” the impact is optimistic than the impact in a “hard Brexit scenario.
3. Amsterdam, Netherlands.
The city of Amsterdam is well known for the business climate created by the Government. The city has a reputation as a business center and this acts in self-promoting businesses established in the city. The languages spoken are efficient for businesses. These organizations also enjoy a pollution-free environment.
4. Berlin, Germany.
Berlin is easily recognizable as one of Europe’s top business cities. The city’s value for office space is also an added advantage for businesses looking to establish themselves in Berlin. This is bolstered by high-quality infrastructure in telecommunications, and internal transportation systems. The languages spoken in the city are also efficient for business organizations.
5. Barcelona, Spain.
Businesses looking to establish themselves in Barcelona will enjoy office space availability and good quality of life for their employees. The city’s reputation as a business center will also self-promote any businesses established in the city.
6. Madrid, Spain.
Madrid offers businesses readily available office space, qualified staff at favorable costs with a good quality of life for employees. The city has a reputation as a business center with good market accessibility. This is bolstered by the city’s developed infrastructure in telecommunications and its internal transportation system.
However, the city can better manage its pollution levels.
7. Brussels, Belgium.
Brussels could also serve as an attractive financial center as the “European Capital” of the European Union hosting most of the European Institutions:
- The Council of the European Union
- The European Commission
- The European Parliament (Brussels, Luxembourg, and Strasbourg)
- … and others.
Businesses established in Brussels enjoy the availability of qualified staff with an efficient language spoken in the city. The reputation of the city self-promotes the businesses established in this city. The infrastructure systems in telecommunication and external transportation are also excellent.
The cost of staff in Brussels is however a red-light for most businesses.
8. Munich, Germany.
Munich enjoys a reputation as one of Europe’s top business centers. The businesses established in this city enjoy self-promotion, availability of qualified staff with good quality of life, well-developed infrastructure systems in telecommunications, internal transportation, and external transportation, and freedom from pollution.
However, availability of office space, value for money for office space, and cost of staff remain quite high in the city.
9. Zurich, Switzerland.
Zurich offers the availability of qualified staff within an excellent business climate created by the Switzerland Government. It has excellently developed infrastructure in telecommunications and both internal and external transportation systems. The languages spoken in the city are efficient in a pollution-free environment with an excellent quality of life for employees.
The value for money for office space and availability of this office space is a major issue. The cost of staff is also high.
10. Milan, Italy.
Milan enjoys a good reputation as a business center with good market access. Businesses established in the city will enjoy self-promotion from this reputation.
However, the business climate created by the government is quite negative. Value for money for office space and pollution in the city remains a major issue.