Henry Ridgwell
July 25,2016
LONDON— By most measures, London rivals New York as the only true global city. But Britain’s vote to leave the European Union, the so-called "Brexit," means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters.
The prospect of leaving the European Union, and with it access to the prized single market of 500 million people, has sent shivers through the city of London.
"This is about the negotiation [with the EU]. The mayor of London has made clear, as has the prime minister, that we want to negotiate continued access to the single market," said David Slater of promotional body London and Partners.
But other EU leaders insist Britain cannot have access to the single market, and at the same time, restricts on European immigration -- the core issue that drove the "Leave" campaign to victory in June.
So with Britain seemingly on its way out of the single market, other cities are eyeing London's position as Europe's leading city.
Along with Frankfurt in Germany, Paris is among those best placed to steal a share. The French government recently spoke of "rolling out the red carpet" to firms fleeing Brexit, promising to make its tax regime for expatriates the most favorable in Europe.
"We have very international companies. If you compare the situation to 10 years ago, the situation has completely changed. The French corporations operate a major part of their activities in the global world," Arnaud de Bresson said.
London is also Europe’s leading hub for tech industries, with more than 3,000 start-ups based in the city. Many are around the so-called "Silicon Roundabout".
Berlin spies an opportunity: It is already Europe’s second-biggest tech city and the real estate is far cheaper than London.
“With Brexit, London has more or less taken itself out of the race. And we do believe that over time the advantage of Berlin will grow and more tech start-ups will come to Berlin,” said Lukas Kampfmann .
In a recent article, The New York Times rated Amsterdam as best placed to steal London’s crown, thanks to its global connections, English-speaking population and attractiveness to expatriates.
But London’s proponents insist the city will remain number one.
“Because the people that do the business and have the expertise want to remain here, and the government and the Mayor of London will do everything they can to keep them,” said David Slater of London and Partners.
London contributes nearly a quarter of Britain’s national income. The Brexit vote has plunged the country into uncertainty, and rivals in Europe are watching with interest.