With Britain due to hold a referendum by 2017 on whether to leave the European Union, many businesses in Germany are warning of disaster and the loss of a key export market. The German financial capital Frankfurt, however, is looking at the possibility of a Brexit with a sly smile on its face.
If banks choose to vote with their feet, London’s loss could be Frankfurt’s gain.
It’s a mouthwatering prospect for Germany’s sleepy financial capital that has long had designs on becoming something greater – a European heavyweight that could dislodge London as the biggest financial center on the continent.
The hopes began with the arrival of the euro, a common currency for 11 countries initially, now for 19.
Britain opted to stay out of the European currency project, keeping the pound, and Germany won a battle with France to host the euro zone’s new central bank. The European Central Bank set up shop along the Main River in a shiny new office tower on the edge of Frankfurt in a run-down neighborhood.
Alexander Radwan, a member of the Bundestag with Germany’s Christian Democratic party, remembers the expectations surrounding Europe’s biggest unifying project. Frankfurt or maybe Paris, it was hoped, could eventually replace London as the biggest financial capital in Europe.
“We believed at the time that the strongest European financial center should be in the euro zone,” Mr. Radwan, who serves on the parliament’s finance committee, told Handelsblatt Global Edition.
But many have falsely warned of London’s imminent demise as Europe’s finance capital. And so it is with a healthy degree of skepticism that Mr. Radwan eyes the current debate surrounding “Brexit.”