France says post-Brexit City must relinquish euro business

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Brussels, Jun 30: Britain's City of London financial district would have to give up its role in processing euro currency transactions after it leaves the European Union, French President Francois Hollande has warned.

Hollande said other European financial centres should be ready to take over from London, which is home to many banking clearing houses that deal with euros.

Brussels

"There is no reason for Europe, and still less the eurozone, to allow a country that is no longer a member of the European Union and has never been a member of the eurozone to continue operations in euros," Hollande said yesterday after a summit in Brussels.

The French leader added that European financial centres should "prepare to take on a certain number of operations that can no longer be done in Britain". In a separate interview with French business daily Les Echos Hollande said France itself should "adapt its regulations, including fiscal (regulations) to make the Paris financial centre more attractive".

On Tuesday, the president of Paris Europlace, a group that promotes French finance, met with Finance Minister Michel Spain to suggest ways of boosting the French capital's ability to woo City bankers. Britain's shock vote last week to leave the EU has sparked questions over its role as Europe's financial capital, with cities like Frankfurt, home of the European Central Bank, and Dublin also hoping to cash in on any move out of London by financial companies.

The issue of whether euro clearing houses can remain in the British capital is set to be one of the most contentious issues as Britain seeks to negotiate its future trade relationship with the EU after its departure.

Britain has jealously guarded its status and won a recent EU court decision against the European Central Bank in order to keep hosting the euro deals. Jonathan Hill, a Briton, was the European Commissioner in charge of the coveted financial services portfolio until his resignation on Saturday following the referendum result. 

AFP

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