Photo: Luc Legay/Flickr
Continental Breakfast: your daily update on what’s happening in Europe.
Mixed messages from France over whether the country wants Britain to be part of the European Union. Former French president Nicolas Sarkozy has promised to give Britain a chance to cancel Brexit and remain within the EU if he is reelected next year, while French regulators have sought to capitalize on the U.K.’s decision to leave by luring business away from the country.
Sarkozy told business leaders that if he wins back the country’s premiership in its national elections next May, he would immediately negotiate a new EU treaty with Germany and then allow the U.K. to put a halt to Brexit.
“I would tell the British, you’ve gone out, but we have a new treaty on the table so you have an opportunity to vote again,” he said.
The U.K. government is yet to trigger Article 50 and start the two-year deadline to negotiate the country’s exit from the EU, so could theoretically hold a second referendum or just decide to ignore the result of the first vote, which isn’t legally binding. British prime minister Theresa May hasn’t set a timetable for Brexit, but has said she will not trigger Article 50 this year.
French regulators, meanwhile, have simplified the process of registering financial companies and said they will now accept legal documents written in English in an attempt to entice banks and other businesses from the U.K. following the Brexit vote. Financial institutions will now be able to secure “pre-authorization” for a move to France in just two weeks. The country’s financial watchdog and securities regulator said in a statement that they are “getting ready to welcome British-based institutions that wish to locate their business in France.”
The French government has traditionally been seen as ambivalent towards financial institutions, but the country has made a concerted effort to profit from any uncertainty over London’s continued standing as the region’s leading finance hub post-Brexit. Shortly after the EU referendum in June, France introduced significant tax breaks for expatriates, with Paris’ deputy mayor famously saying the city would be “rolling out the red carpet” to bankers. French prime minister Manuel Valls has said the country wants to be “the financial capital of the future.”
Many U.S. and international banks use London as the headquarters for their European operations, with the EU’s so-called passporting regime allowing them to trade freely across the region. It is unclear whether these passporting arrangements will continue once Britain leaves the EU, however. Several financial institutions have warned that they may shift business away from the U.K. if it loses access to Europe’s single market.
In legal news, King & Wood Mallesons (KWM) is finally ready to elect a new European managing partner after tax partner Gareth Amdor and corporate partner Tim Bednall were confirmed as the two contenders.
The Sino-global firm has been on the hunt for a new European leader for more than six months, after William Boss stepped down in February just one year into a three year term. KWM has planned on having a replacement in place by May, but the process was pushed back following a massive restructuring that saw 15 percent of its partners in the region leave the firm.
The firm has endured a difficult time in Europe since its combination with London-based SJ Berwin in 2013. KWM’s European and Middle Eastern partners voted earlier this summer to boost the firm’s capital by injecting 14 million pounds ($18.4 million) of their own money, with salaried partners also agreeing to contribute capital for the first time in the firm’s history. KWM also agreed to grant its key European lender, Barclays Bank, a debenture over its assets in order to provide the bank greater security against its lendings, and delayed its profit distributions to partners. The firm failed to pay any partner profits in July, despite having recently changed its remuneration system in March to start paying profit distributions to partners on a monthly basis following repeated delays to its quarterly setup.
KWM is also in the process of finding a new European senior partner, after incumbent Stephen Kon decided to stand down earlier this month. The nomination process for that role begins next week.