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France to cut taxes in bid to win Brexit bank jobs for Paris

France to cut taxes in bid to win Brexit bank jobs for Paris

PARIS: French Finance Minister Bruno Le Maire has vowed Paris will beat Frankfurt to become the EU’s main financial centre after Britain leaves, even as he acknowledged that the French capital is playing catch-up. “We will take the difficult decisions, we will lower French taxes, we will make our country more attractive. We will win the race,” Le Maire said in television interview.

Since the UK voted last year to abandon the EU, France has been fighting with Germany and Ireland to grab a part of the financial industry that plans to relocate out of London. But stiff rules on firing workers, high and volatile taxes have marred French efforts – it’s only five years since Francois Hollande came to power declaring that financiers were his enemies and slapped on a 75pc rate for top earners. As a result, Frankfurt has already won about twice as many relocation commitments from major banks as Paris. Le Maire announced late last month that he’ll scrap a tax on financial transactions next year, saying it was a deterrent to banks considering a move to Paris. President Emmanuel Macron has also pledged to gradually cut the corporate-tax rate to 25pc by the end of his term in 2022 from 33pc. The government is also boosting funding for more bilingual schools to make it easier for expatriates to adapt to French life.

Paris is hoping to lure 20,000 jobs from the UK as firms seek EU locations to secure continued market access to the bloc, according to Paris Europlace, France’s main financial lobby group. France is also bidding to make Paris the new home of the European Banking Authority (EBA). Ireland has also launched an EBA bid and the IDA says more than 15 financial institutions intend to move to or expand operations here, including JP Morgan, Bank of America, Citi and Legal & General.

HSBC, which has a French retail bank, has said it may relocate as many as 1,000 traders to the French capital, while banks including Standard Chartered and Nomura Holdings have picked Frankfurt. Deutsche Bank is preparing to move trading and investment-banking assets to its hometown. Paris is 29th on the Global Financial Centres Index by Z/Yen Group, just above Casablanca (30) and Dublin (33). London tops the list, followed by New York and Singapore. “Many banks, many investors, should be aware that France is changing,” Le Maire said, citing PSG’s record signing of Brazilian soccer star Neymar. “Tomorrow, France will be the place to be. Not just for Mr. Neymar, but for all investors.”