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Frankfurt Pushes for U.K. Finance to Access Single Market--Update

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07/11/2016 | 12:29pm EDT
By William Wilkes 

FRANKFURT--Frankfurt will push for the U.K. to be allowed the maximum possible access to the single market in financial services following the country's vote to quit the European Union, even as it hopes to attract jobs from a Brexit fallout.

Frankfurt officials said that while U.K. cannot be given unconditional access to the single market, it will benefit Frankfurt to see London maintain its status as global heavyweight located in the region.

"We think the U.K. should be offered the utmost access to the single market, depending on what trade model the U.K. government decides upon," said Hubertus Väth, managing director of Frankfurt Main Finance, the group promoting Frankfurt.

He said that rather than trying to supplant London as a global economic hub post-Brexit, nearby Frankfurt is better-positioned for a supporting role.

"Frankfurt has decided to be the bridge to the financial center of London," said Mr. Väth.

Top officials from Germany's central bank met with local politicians and financial sector lobbyists in Frankfurt on Monday to discuss a campaign to lure some financial jobs away from the U.K. capital. Frankfurt officials said after the meeting that they will visit London in mid-August to promote Frankfurt as an alternative location for firms worried about Brexit, but Mr. Väth said that Frankfurt would likely only attract a very small slice of the more than 700,000 financial services jobs in London.

"We believe London will remain the foremost financial center in Europe. It is not our strategy to weaken London," Mr. Väth said.

The U.K.'s vote to quit the European Union has raised concerns about whether banks there will retain access to the single market. Whether the U.K. gets a deal that allows it to sell financial products across the EU--so-called passporting--is likely to be a key factor in banks' decisions on whether they stay in London or relocate to other EU cities such as Dublin, Paris or Frankfurt.

The French government has insisted U.K. financial services would lose single-market access if the British government refuses to play by the rules of the EU. Frankfurt will press policy makers in Berlin and Brussels to grant the U.K. the maximum access possible, conditional on what trade agreement London reaches.

"We clearly disagree with any sort of punishment," Mr. Väth said.

Frankfurt's open position on Brexit echoes that of Deutsche Börse AG, which remains committed to its planned $30 billion merger with London Stock Exchange Group PLC despite the U.K.'s vote to leave the EU.

Hessian Economic Minister Tarek Al-Wazir of the Green Party said Monday that he was worried about the uncertainty enveloping the U.K. economy. Mr. Al-Wazir said that while Brexit held opportunities for Frankfurt, the city has a strong interest in U.K. stability.

"Where do all these people who come to stay in hotels in Hesse come from? There's a lot of media coverage about the Chinese but there's still more visitors from the United Kingdom," Mr. Al-Wazir said, speaking of the German state where Frankfurt is located.

Even if Britain is allowed to keep some rights to the single financial market, there's still plenty of interest among other cities in capturing a chunk of London's financial jobs.

Ireland's foreign investment agency has written to businesses with offers to help them relocate to Dublin, while Stefan Franzke, chief executive of Berlin Partner, an agency sponsored by the state and companies in Berlin to promote the German capital, has assembled a 12-person team with the task of attracting more business from London to Berlin.

In Paris, Prime Minister Manuel Valls last week publicly called for Paris to be "the premier financial market of Europe," pledging to extend a favorable tax regime for expatriates and to create places in bilingual schools for foreign children.

Write to William Wilkes at william.wilkes@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
ACCESS CO., LTD. 0.25% 799 End-of-day quote.-16.34%
HUB CO., LTD. 0.00%End-of-day quote.0.00%
HUB CO., LTD. 0.00% 604 End-of-day quote.-42.03%
PREMIER, INC. 1.67% 35.3 Delayed Quote.-8.34%
TEAM, INC. 0.31% 6.44 Delayed Quote.-59.80%
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