Frankfurt: ready to help
What may happen in post-Brexit EU
by Eric Menges in Frankfurt
Thu 28 Apr 2016
If Britain decides to leave the European Union on 23 June, Frankfurt is a probable winner – at least in part. Some financial market participants would look for an alternative to London to maintain business models that require a European passport or single market privileges.
Naturally, any development that slows growth or increases the cost of intra-European trade poses risks to Germany’s internationally integrated economy. Frankfurt with its large airport – important for both passengers and freight – and international trade fairs would suffer if trade declined after ‘Brexit’.
The Frankfurt region (spanning a 30-minute drive from the city and its airport) is often misunderstood to be predominantly a finance hub. In fact, automotive, life sciences, IT, consulting and automation are major sectors too, in some cases these are much larger than finance. They all rely on international trade. No one in the Frankfurt-Rhein-Main area would look forward to a post-Brexit Europe studded with trade barriers.
In finance, Frankfurt and London have been closely interlinked for many years. Whether or not the UK stays, there is much room for greater co-operation. There is certainly competition in terms of traditional financial institutions choosing between the two cities. However, the competitive element is less prevalent when it comes to new technologies and ideas created through international co-operation of young entrepreneurs, start-ups and universities from various countries and sectors.
Fintech companies, for example, have a better chance of achieving global scale if they design their business models with a large number of partners from varied business sectors and economic environments. In the face of growing competition from other parts of the world, Frankfurt and London can work together to generate UK and European fintech growth.
Frankfurt and the Frankfurt region are natural partners for London and the UK. With more than 200 foreign banks, more than 100 foreign consulates and over 30 international schools, English is the second language. People from the UK sent here for work find it easy to blend in. Every time I come to London I am amazed how easy it is to find my way around the business and social world.
For several years my marketing agency has made the UK one of our key priorities. We have worked with many companies that wish to increase their continental footprint. None has actually relocated from the UK to Germany. But they have decided that, in addition to their British base, a Frankfurt presence will help them access clients and markets for long-run benefits.
Whatever happens on 23 June, Frankfurt will intensify co-operation with companies from London and the UK. Should post-referendum circumstances require professionals to set up in Frankfurt, we are here to help. We like the Brits and would be reluctant to see them depart. But if they go, they go. Anyone facing the prospect of having to move parts of an enterprise (or the family) to Germany should contact me. Before and after 23 June, Frankfurt is open for business.
Eric Menges is Chief Executive of the Frankfurt-based promotional agency FrankfurtRheinMain GmbH, owned by the main municipalities in the region. This is No.44 in the series.
OMFIF’s series on the UK EU referendum presents a wide variety of perspectives from Britain and around the world ahead of the 23 June poll. We are assuring a balance between many different points of view, in line with OMFIF’s overall neutral stance on the issue.
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