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FINANCE

Brexit sent 2,500 jobs and €170 billion assets to France, says French bank chief

The Bank of France's governor said on Tuesday that Britain's withdrawal from the European Union has driven almost 2,500 jobs and "at least €170 billion in assets" to France so far.

Brexit sent 2,500 jobs and €170 billion assets to France, says French bank chief
Governor of the French central bank Francois Villeroy de Galhau. Photo: AFP

London remains the foremost financial centre but Amsterdam, Dublin, Frankfurt and Paris all scrambled to attract businesses that wanted to remain active in the 19-nation eurozone.

The coronavirus pandemic made it even more important to boost business activity, given its severe economic effects.

“In spite of the pandemic, almost 2,500 jobs have already been transferred and around 50 British entities have authorised the relocation of at least €170 billion in assets to France at the end of 2020,” bank governor Francois Villeroy de Galhau told a press briefing.

“Other relocations are expected and should increase over the course of this year,” he added.

In particular, Brexit has forced Europe to develop its financial autonomy, de Galhau said.

The EU still allows London clearinghouses to operate across the continent for 18 months, because the union does not have comparable institutions of its own.

Once that deadline has expired however, financial transactions in euros are in theory going to have to be settled within the EU.

In addition, “a true 'financing union' must allow us to better mobilise surplus savings in Europe, almost 220 billion euros, in favour of productive investments,” the central banker said.

He urged that the opportunity provided by Brexit be used to create a functional “union of capital markets” in the EU.

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ECONOMY

France warns winter gas cuts possible

The French government warned Wednesday that companies might have to reduce energy use this winter even with the country's natural gas reserves at full capacity, as Russia continues to reduce its gas exports to Europe.

France warns winter gas cuts possible

“The main players, government agencies and businesses, must reduce their consumption” of gas as well as electricity, because “the two systems are linked,” Energy Minister Agnes Pannier-Runacher told CNews television.

Moscow has slashed its exports to Europe in response to punishing Western sanctions over the invasion of Ukraine by Russian forces, forcing countries to scramble for alternatives.

Even though France is less reliant on Russian supplies than other EU countries, generating around three-quarters of its electricity from nuclear power plants, its industrial sector still relies on gas and millions of people use it to heat their homes.

Winter shortfalls will be a risk even though France is racing to top up its gas reserves.

“Right now our strategic gas reserves are at 80 percent capacity… which means we will reach our goal of 100 percent before November 1,” Pannier-Runacher said.

But she later insisted on RMC radio that full stocks might not be enough to avoid gas cuts as the government seeks alternative sources.

“It’s not so simple… We might have a particularly cold day and because of the size of the pipelines, we can’t pump all of the gas we have,” she said.

And France is also facing a winter with fewer of its nuclear plants online because of either maintenance or safety concerns, meaning that electricity supplies could be strained.

“We are counting on solidarity, notably with Germany, to import electricity,” she said. “And we need to support Germany with the gas we import via our liquefied natural gas terminals.”

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