PM sets out ambition for Paris financial centre
European Union – Attractiveness/Brexit/”Our ambition for the Paris financial centre” – Communiqué issued by the Prime Minister’s office¹
Paris, 7 July 2017
M. Edouard Philippe, Prime Minister, Mme Anne Hidalgo, Mayor of Paris, Ms Valérie Pécresse, President of the Ile-de-France Region, and M. Patrick Ollier, President of the Métropole du Grand Paris [Greater Paris Metropolis], are working to make Paris Europe’s leading financial hub after Brexit.
The Prime Minister has announced several measures to strengthen Paris’s attractiveness as a financial centre: “The European financial landscape is being reshaped. Paris’s distinctive assets will be clear to see, but this will not be enough unless we address certain weaknesses. This is why the bold package that we have discussed together and that we are announcing today show our shared determination and commitment to make our financial centre more competitive and attractive. This move by the government is part of a general drive to strengthen France’s attractiveness and competitiveness. We must ensure that companies wish to come and develop in France rather than elsewhere. This is also a way of boosting our economic and financial sovereignty within a Europe which must assume its responsibilities. It cannot continue to rely on financial centres outside the EU to finance its companies and create jobs.”
Anne Hidalgo highlighted that “Paris is renewing its commitment as part of a united front to defend the attributes of its financial centre. Together, we must promote the quality of life, vibrant economic fabric and innovation ecosystem, which make Paris one of the most attractive cities in the world. The dynamism of the city’s Fintechs and the commitment of Paris’ financial stakeholders to green finance put Paris at the heart of the key financial issues of the future.”
Valérie Pécresse underlined that the Ile-de-France region has been dedicated to the issue of attractiveness for a year and a half, against a background of unbridled competition between Europe’s major cities: “The region is Europe’s leading economic power and the world’s fourth-largest: its image abroad is changing; the Paris region brand is starting to symbolize a place of innovation where it is good to do business. The region has started an unprecedented public transport upgrade programme and an ambitious investment plan for lycées with the construction of three international secondary schools planned for 2022. Several members of the regional council and myself have taken part in roadshows in London, New York, Tokyo and Shanghai to showcase the region’s assets. Through its development agency, Paris Region Entreprises, the Ile-de-France Region is coordinating all attractiveness stakeholders and is managing the one-stop service for foreign investors, Choose Paris Region, which was up and running very shortly after the Brexit referendum.”
Patrick Ollier highlighted the efforts already made by Grand Paris Métropole and the aims for this new chapter: “Global competition is principally between large cities. The “Inventing Greater Paris Metropolis” call for projects has enabled us to build up fantastic momentum equal to €6.4 billion and 2.6 million m² of build space, which equates to 1% of the city’s GDP. The attractiveness of Greater Paris is unquestionable! We must now ensure that this brings jobs to our area. Our goal is to boost competitiveness at all levels. The one-stop service has enabled us to make a lot of progress. Let’s work together to take it to the next level!”
M. Edouard Philippe, Prime Minister of France, set out with M. Benjamin Griveaux, Minister of State attached to the Minister of Economy and Finance, the following measures to make the Paris financial centre more attractive and maximize impacts for the French economy:
Providing clarity and certainty to investors and businesses on tax policy
Economic operators need stable and predictable tax policy. In the autumn, the government will put forward a public finance bill setting out our tax policy for the new term and presenting a tax policy trajectory for businesses with the gradual reduction of corporate taxes by 2020 to 25%, within the European average, and capital taxation reform (solidarity tax on wealth and flat tax on savings and investment products). Our aim is to boost incentives to do business and develop activities in our country and to invest in the equity capital of French companies. The government will also abolish the extension of the financial transaction tax to include intraday operations, voted in 2016 without preparation because it is not applicable and would penalize the Paris financial centre and the coherence of our tax policy.
Making qualified finance professionals more competitive to develop jobs
Promoting the competitiveness of our economy is an overarching goal of the government, which must also take the specificities of the extremely globalized financial sector into consideration, with mobile career paths and cyclical activity. To reduce the cost differentials of highly qualified labour in the financial sector versus comparable European economies, the higher rate of 20% for the top band of payroll tax, introduced in 2013, will be eliminated to foster the creation of direct and indirect jobs. To reduce uncertainty and the costs of terminating employment contracts in the finance sector, deferred bonuses of some qualified finance employees, governed by European rules (on compensation for material risk-takers) will not be included in the calculation of severance pay. The labour law reforms presented by the government will more generally provide a clearer and simpler framework regarding working relationships for companies that are investing in our country.
In order to facilitate job moves to France and international mobility, a system to gradually switch to the French retirement insurance, with a phasing-in for employees relocating from abroad, will be studied with a view to its implementation before Brexit.
Putting forward our legal expertise in the the Paris financial centre
Paris is both a financial and legal centre and its global quality is a major asset. The Ministry of Justice, with support from the Paris Bar Association, will develop a judicial system to deal with international business disputes, with the creation of a specialized chamber in the Paris Court of Appeal based on the experience of the International Chamber of the Paris Commercial Court. This project will be included in the upcoming five-year act on resources for the justice system.
Addressing the “gold-plating” of European directives and committing to long-term simplification
The government is extremely determined to stop the “gold-plating” of European directives transposed into French law. Initial measures to undo the over-implementation of economic and financial directives will be included in the bill on correcting errors and simplification which will be presented to the Council of Ministers in late July. A consultation will be launched to compile examples of “gold-plating” and over-regulation to be examined with a view to establishing a bill on simplifying financial and corporate law.
Developing international education facilities in the Paris region
The Ile-de-France region and the Ministry of National Education have committed to developing international hubs (primary and secondary schools) and international sections in the Ile-de-France region. Three new international secondary schools will be created. At the start of the 2017 academic year, the Lycée Lucie Aubrac in Courbevoie, near La Défense business quarter, will become an international secondary school. The government will fine-tune its ability to work with local government in establishing an education system capable of meeting the challenge of enrolling additional students.
The Prime Minister, in liaison with the Minister of National Education and the President of the Ile-de-France region, has appointed Daniel Filatre, the Chief Education Officer of the Academy of Versailles, and Agnès Evren, Vice-President of the Ile-de-France region responsible for Education and Culture, to oversee the implementation of the plan.
Enhancing the connections of Paris with the main economic capitals
The government confirms the timeframe and the financing of the key infrastructures that are essential to the appeal of France and Paris as a leading international financial centre, with the CDG-Express line between the airport and central Paris. Essential stages have been completed over the past 12 months regarding the legal and financial plans that have been approved by the European Commission. These provisions provide that the Groupe ADP, SNCF Réseau and CDC will invest €400 million in equity capital in the future company responsible for building and operating the new infrastructure. In addition, ADP will provide a €100-million recoverable advance. Making our transport system attractive in the Ile-de-France region is all the more crucial given our desire to host the 2024 Olympic Games in Paris.
¹Source of English text: French government website.