Substitute of Financial Europe after Brexit

Major Banks and other financial institution have their gaze at Frankfurt as their possible destination.

Frankfurt is leading the race in becoming the hub of financial europe

United Kingdom has decided to leave European Union after strong relations since 1973. The official date of withdrawing from EU is 29 March 2019. A lot has happened since the referendum held by British government to let the people of England decide. The polling was to ensure that either they want to stay with other Europe or all they want is to pack up. Eventually, the majority of the citizens decided to withdraw from Europe. However, Prime Minister David Cameron resigned after his promise.  

The associations are already working on to make sure this sudden change does not harm their business. Additionally, they are moving even sacking the staff. In case, Goldman Sachs, a banking centre is trying to ploy its workers over a new and possible European financial hub. There are reports that London may lose 30000 workers in no time and the figure may increase. The city of London is still the global financial capital. Significantly, most of the International banks have their headquarters in London.

Of course, leaving European Union will have some consequences yet it is possible that London will dominate the markets of Asia and some of Europe. Brexit is become the eye pupil of media, especially, the media outside of United Kingdom. There are many things to say about the Brexit. For example, will London be able to retain its place in financial markets? Or if in case not so who will lead as economic and financial hub of Europe?

Reportedly, Banks, insurance companies and business associations are setting up a plan to move over Frankfurt after the official announcement of Brexit. Surely, Frankfurt is going to become the financial hub of Europe and probably, the world. Explicitly, Frankfurt has some points that other cities like Madrid, Paris or Milan do not own. Here are the reasons why we think Frankfurt will lead its way to becoming Europe’s financial chief.

Firstly, Frankfurt is the centre of companies from all around the continent and the world. They’ve got associations from Spain, Turkey, and China and even from the United States. Significantly, about 70% of the German population speaks English fluently. In case, the banks and other companies can go over there and have job discussion even hire the locals without worrying about language or taxation complications. While in other competitor countries e.g. in France only one quarter of the population speaks English and if we mention Spain the percentage drops down to 20% only.

Secondly, Germany is a dispersed country which is significant for the reason that regional governments and trade unions have way more self-rule than any other country in the world. Additionally, this include cooperate tax. The federal government receives only fifteen percent of the tax and the region has the autonomy to reduce the full percentage which is 30% yet highest in the Europe. Forthwith, the Frankfurt has lot to offer to the arriving investors. Al though, labor laws were difficult in case of firing people but the Frankfurt is proposing to change the laws which will exempt the bankers or high investors to be exempted in such case. Furthermore, the house rent is low despite the high ratio of salaries than other cities like London, Paris etc. 

Explicitly, the Frankfurt is evacuating the flaws in financial transaction tax.

Finally, Frankfurt already has the headquarters of European central bank other banks. Surely, we can say the city knows what the network effect is? Frankfurt has got more consultancies, law firms, business schools and universities than any other city in Europe. Additionally, the city owns the second biggest airport in Europe.

Final Analysis

By and large, Germany is the significant economic power and besides France it is the only country that could possibly counter and fill up the gaps left by Britain’s withdrawal. Furthermore, the Frankfurt provides the tax reform to the major banks and institutes and it has been reported that prestigious associations like Standard Charted, Nourma Company and Morgan Stanley has decided to move over the place.

Meanwhile, German Finance Ministers have met personally with the heads of companies to ensure them cooperation and sound environment. Frankfurt is situated in the region of Hesse, which holds a key position in the centre of the country. An entrenched and established Frankfurt and Hesse will contribute strengthening the country.