PARIS — As he flies to New York Friday to convince Wall Street firms to invest in Paris, French Finance Minister Bruno Le Maire is working to make them feel at home.
The French government is working on measures to make Paris more appealing as a financial hub. The package, planned for the first half of next year and aimed at attracting more bankers displaced by Brexit, would seek to simplify France’s legal and fiscal framework, often perceived as an obstacle for the financial sector.
A French economy ministry official on Thursday confirmed Le Maire “will go further with reforms” and is working on a “legislative or regulatory initiative for 2024.”
In New York, Le Maire will be fishing for ideas at meetings with finance heavyweights including Goldman Sachs, Morgan Stanley, BlackRock or Global Infrastructure Partners. He will “take the pulse” and listen to “the expectation of the banking and financial sector, the way in which they perceive Paris and the type of measures” that could be adopted next year, the official said.
The plan, first reported by Bloomberg, could include measures ranging from tweaks to labor laws to facilitating the listing on the stock market of small and medium-sized enterprises, according to a government official not authorized to speak publicly.
The project is still at an early stage but two officials with direct knowledge of the file say measures could be inspired by a report presented this week by Charles Rodwell, a lawmaker from Macron’s party.
Among proposals to convince foreign businesses to expand in France, the Franco-British MP suggested easing labor laws, something particularly interesting for financial firms which wants to fire and hire more easily.
Macron’s government already made France more finance-friendly since the U.K. left the EU in January 2020, for instance with fiscal benefits and tweaks to France’s famously rigid labor law.
Rodwell wants to go further by making it easier and less costly to fire high-income employees. One option is to ease rules on severance payments companies have to pay in case of layoffs. The reform would only affect layoffs of top earners (typically those with a salary around €500,000 per year.)
The move is targeting more specifically asset management firms. “It’s a highly fluctuating business with highs and lows in terms of recruitment. The rigidity of our labor market isn’t necessarily fit for these types of jobs” Rodwell said.
The measure would be in line with Le Maire’s goal to attract financial actors other than banks, like private equity funds and sovereign funds.
Other measures suggested by the report include easing rules for capital increases and creating a mechanism to put non-listed companies in contact with potential investors to encourage them to enter the stock market.
France could also create the role of ambassador for France’s financial attractivity, similar to the already existing position of ambassador for international investments held by former Apple executive Pascal Cagni.
Since 2016, former Bank of France governor Christian Noyer has led a task force to promote Paris’s appeal as a financial center. Last year, Le Maire extended his mission until June 2024. Contacted by POLITICO, Noyer said that thinking on further measures were still at an early stage and that no major overhaul should be expected.
“The government tries to send a positive message,” said Alexandre Holroyd, another MP from Macron’s party who worked on the consequences of Brexit. “Paris has already won the match against Frankfurt, Amsterdam and Milan,” he said, while acknowledging that “some little things can always be improved.”
The French strategy already bore fruits. The Paris region gained around 2,800 finance jobs thanks to Brexit between 2016 and 2022, doing better than Frankfurt, according to a 2022 study by consultancy EY.
Macron himself, a former investment banker, put his face to these efforts. For example he personally inaugurated JP Morgan’s new offices in Paris’ iconic place Vendôme in 2021. In parallel, Paris is competing with other EU cities to host the EU’s new anti-money laundering watchdog in a bid to top the list of EU financial institutions already based in Paris like ESMA and the EBA.
“Thanks to major tax and labor law reforms, as well as the concentration of talent and quality of life that Paris offers, we’re neck and neck with London. But we can’t stop there,” said Rodwell.
The government has not yet made its mind up on whether to adopt new measures in a new dedicated text or as part of a broader law, already in the works, for the simplification of the French economy, according to people with direct knowledge of the file.
