On the surface of it, these effects might seem slight. The European Banking Authority, which oversees the E.U.’s banking sector with measures such as stress tests, employs just 167 people—barely enough to occupy a whole floor of the East London skyscraper where it currently lodges. The European Medicines Agency, which evaluates and regulates European medical products, is a little more hefty at 900 employees. Taken together, the two agencies still constitute barely a drop in London’s huge employment ocean. But their departure from the British capital still matters.
For a start, they draw in money, both from their own budgets and through the many officials who visit London to conduct business with them. It’s estimated, for example, that those calling on the EMA fill around 350 hotel rooms every week. For a city as small as Amsterdam, with less than a tenth of London’s population, that alone is a major boost in income.
More significantly, the moves shift the map of European influence. Paris gaining the EBA is a major coup for its aspirations to become the E.U.’s de facto financial capital, a position currently held by Frankfurt, which failed to win its bid to host the agency. The EBA’s move to Paris could bring other relocations in its wake and replace much of the past year or so’s bluster about profiting from Brexit with something concrete. It also sets the scene for what may be a tug-of-war between Paris and Frankfurt for greater influence, one underlined by Goldman Sachs’ announcement yesterday that both cities would host its future European headquarters.
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