Dublin, a Future Hub for Financial Firms Fleeing Brexit
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Britain’s plans to leave the EU have a Silver Lining is expanding daily along the banks of the River Liffey, a likely post-Brexit refuge for London’s City banking operations.
Dublin’s financial district stretches for nearly a mile on both banks of the river. More than 60 construction cranes are erecting future high-rise offices, hotels and apartments along the Riverfront.
Britain’s definitive exit from the EU may be at least 2 years away, but Dublin is 2X’ing down on its commercial building revival, confident that thousands of financial services jobs are poised to migrate 465 clicks northwest in search of a new EU home that’s not too legally, linguistically or culturally different from The City.
In Dublin, the Key concern is whether there will be enough offices, homes and school space.
“Every one of these construction sites already has tenants booked through Y 2019. We will need to build faster and higher if there’s a hard Brexit as we now expect,” said a spokesman for the Construction Industry Federation of Ireland.
Under a “hard” Brexit, Britain would leave the EU without retaining privileged access to the bloc’s single market. Financial houses based in London that currently manage assets and investments throughout the EU would need to transfer some operations, and potentially a sizable bits of their work force, to retain business.
Authorities planning Ireland’s infrastructure needs through Y 2040 estimate that the country, even without a single Brexit-related job, already requires more than 110,000 construction workers on top of the 140,000 employed today building projects valued at $20-B.
Those targets will have to be raised if London-based jobs come to Dublin. Among the companies already signaling their interest are Britain’s 2nd-largest bank, Barclays, and US asset manager Legg Mason.
The Central Bank says it’s been fielding dozens of such overseas inquiries monthly, particularly from insurance companies .
The challenge will be create living and working space in time.
Officials representing London’s financial district stress that their world is so vast and powerful that it can shrug off any job defections.
“London is a unique financial and regulatory professional services ecosystem. There is nothing like it anywhere else in Europe,” said the CEO of TheCityUK, a lobbying group that represents Britain’s financial services industry.
He expressed confidence that the vast majority of 2.2-M British financial jobs, a 3rd of which are in London, would adapt to whatever UK-EU relationship emerges .
Independent experts say London might be grossly underestimating losses.
Financial services proponents in France and Germany, the nations at the core of EU power, are gearing up their own capacity to shelter City of London migrants.
At the La Defense financial center in Paris, construction is underway for 7 more skyscrapers by Y 2021. Its boosters have placed subway ads in London suggesting that Paris might offer a nicer personal environment. “Tired of the fog? Try the frogs,” reads one of them.
France has claimed an early scalp with news that HSBC, Britain’s biggest bank, plans to relocate around 1,000 jobs from London to Paris by 2019.
Frankfurt, the German headquarters for the European Central Bank that oversees the Euro, is planning its own expansion as it fields dozens of research visits monthly from US and British banks.
Officials for Goldman Sachs, Morgan Stanley and JP Morgan have been spotted scouting out potential office space in Frankfurt.
Whereas Ireland’s infrastructural deficit is plain to see with traffic-clogged roads and scattershot public transport, France and Germany stress that they are better places to live than London.
The large numbers of US banks with fully licensed subsidiaries already rooted in Ireland gives the Irish an edge, sharpened by the country’s EU-low 12.5% rate of tax on corporate profits. France and Germany, by contrast, levy rates of 30 to 33% .
Ireland, which until Y 1922 was part of the UK, is seeking to win British hearts and minds one soiree at a time.
Representatives from dozens of British-based banks, investment managers and financial technology firms packed into the Irish Embassy in London last week to sample canapés, shots of Irish whiskey and pints of stout, with a sales pitch on the side.
Its message: We’re staying in the EU and we’re a lot like you.
“Ireland is in the same time zone. It has a very similar business culture, the same similar legal system, a very good, highly educated, flexible work force, many of the qualities that London has,” said Ireland’s Ambassador to Britain, Dan Mulhall .
“We’re not expecting that the whole of the City of London is going to move to Dublin by any means,” he said. “But for those who need to find a location within the European Union for some of their activities post-Brexit, there is no better place than Ireland.”
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