Brexit: the great relocation battle

Who will win the war of the European agencies? Both the European Medicines Agency and the European Banking Authority will have to leave London to find new homes once the UK withdraws from the EU.

EU nations vie for the EMA and EBA
From Amsterdam to Zagreb, it is a relocation battle the like of which Europe has never seen. The prizes – and the challenges – are huge: accommodating more than 1,000 highly skilled employees and their families when they move from London; becoming the new home of two prestigious EU agencies that generate more than 36,000 hotel visits a year; and hosting organisations with annual budgets running into hundreds of millions of euros.Which is why 19 countries are bidding to become the new base of the European Medicines Agency(EMA) and eight nations are trying to entice the European Banking Authority (EBA). Both organisations are currently headquartered in London’s Canary Wharf, but, because of Brexit, must be moved and operational by the start of 2019.There are occasional moments of levity amid the glossy brochures and slick videos many of the rivals have produced to support their very serious bids. Amsterdam, for instance, has cited the fact that the Dutch, like the Brits, have “a very stylish Queen” and enjoy fish and chips. And the Czech Republic’s offer of unlimited access to Prague Zoo is being countered by Warsaw’s claim that its restaurants are its best-kept secret.

What does the EU require from its candidates?

But behind the flashes of PR humour are intense competitions for the two agencies – a battle that will come to a head on 20 November, when foreign ministers from the 27 remaining EU nations will embark on a complicated voting process to select the two winning cities.Bids for the agencies were submitted at the end of July, and only Estonia, Slovenia, Cyprus, Hungary, Lithuania and Latvia opted not to make a pitch for either. Cyprus had originally intended to bid for the EMA but changed its mind, complaining to Brussels that the criteria set by the European Commission effectively excluded smaller member states from being considered.Those criteria include demands that the agencies be up and running before the UK leaves the bloc in March 2019; that staff be accommodated in new homes by that date; that the successful cities have comprehensive air links to other member states; and that there be ready access to international schools for the children of current staff, medical and social security facilities for expat workers and their families, and suitably qualified staff available locally should some existing workers decide not to relocate from London.“Unexpected higher, faster or more permanent loss of staff as a consequence of the agency’s relocation may lead to a situation in which EMA’s operations can no longer be maintained,” the agency warns bluntly.And the EMA, which is responsible for approving and monitoring the safety of drugs across Europe, is the biggest prize. It currently has an annual budget of €305 million and a workforce of 890, most of whom have families.
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Small wonder, perhaps, that Amsterdam, Athens, Barcelona, Bonn, Bratislava, Brussels, Bucharest, Copenhagen, Dublin, Helsinki, Lille, Malta, Milan, Porto, Sofia, Stockholm, Vienna, Warsaw and Zagreb have all made bids to become the agency’s new home.Meanwhile, the EBA, which has 189 employees in London and coordinates banking regulations throughout the bloc, has seen Brussels, Dublin, Frankfurt, Paris, Prague, Luxembourg, Vienna and Warsaw throw their hats into the ring, with Frankfurt – already home to the European Central Bank – tipped as the front-runner.But were Frankfurt to land the EBA, it would mean Bonn could not win the EMA, as, under the commission’s rules, no one country can be awarded both agencies. Besides, Paris has been lobbying hard to attract the EBA as part of a wider effort to become the EU’s financial hub after Brexit.Former French President Francois Hollande wrote personally to European Commission President Jean-Claude Juncker, saying, “Paris hosts four of the eight largest banks in the EU27. It is essential that the EBA is implanted in the heart of the financial ecosystem, allowing for a constant interaction with professionals in the sector.”

The candidate countries for the EMA and the EBA

Complicating the whole bidding process is the fact officials have been suggesting that the European Commission would like to see at least one of the agencies located in one of the newer EU nations in Central and Eastern Europe. This is a sentiment that has boosted hopes in Warsaw and Sofia of attracting the EMA.President Boyko Borissov said in a letter to Mr Juncker and Donald Tusk, president of the European Council, that Sofia’s bid “reflects Bulgaria’s commitment to common European values and fundamental principles, as well as the will of our country to continue to contribute constructively to the consolidation of the objectives of European policies, including in the field of public health”.For its part, Poland argues it is the perfect home for the EMA. “Following a successful economic and social transformation over the past 25 years, Poland has become an attractive market for the pharmaceutical industry, offering stability and a predictable regulatory environment. Poland is currently the largest pharmaceutical market in Central and Eastern Europe and the sixth-largest across the continent,” the Polish government states.And while the Czech Republic’s somewhat surprising bid for the EBA seems to centre on the fact that Prague is geographically located in the heart of Europe, an underlying argument appears to be that the Czechs are determinedly more pro-EU than some other eastern European countries.Such arguments have bothered Italian Prime Minister Paolo Gentiloni, who has called on other EU heads to make sure their decisions are based on the quality of bids and not on “geopolitical rebalancing”. Speaking at the launch of Milan’s attempt to win the EMA, he insisted that Italy had come up with a very competitive proposal.“We will present a competitive dossier to Europe. Intelligent solutions and value that will be brought to the area have been found,” he said. “Today, we are faced with a huge opportunity for the country, for Lombardy, and for Milan. We know that the competition is more and more about excellence, and excellence means being able to attract jobs and business.”The prospect of getting a slice of this lucrative pie is not lost on the other contenders and, indeed, is a concept that Athens is hoping to capitalise on. Rena Dourou, governor of the Attica region, says that selecting Greece for the EMA would further boost the national recovery that has occurred since the dark days when it appeared the country might have to pull out of the Eurozone.While maintaining that Athens offered “an environment perfectly suitable in all aspects – access to the labour market, operation of international educational institutions, mild climate, comfortable accessibility, security,” Ms Dourou went further and suggested that the EMA’s relocation to Greece would help to consolidate the improving economic climate in Greece.“A positive development will mean very good news, not only for the pharmaceutical sector, which is of strategic importance for our country, but for the national economy as a whole,” she said. “This is good news also for Europe.”

Finding the right lure

Yet it is in Dublin where most optimism can be found over the chances of winning one of the agencies, not least because the Irish government is offering more than €100 million in rental and relocation support. A €78 million contribution is being offered towards the relocation expenses of the EMA, with a €10 million relocation support service to help staff and their families find accommodation, schools, and jobs for spouses.For their banking agency bid, the Irish are offering similar support for staff and their families and a 50 per cent rent reduction on the EBA headquarters for up to ten years – although this has been matched by Luxembourg’s offer of an unspecified period of rent-free accommodation in the new HQ.Irish Minister of State for Financial Services and Insurance Michael D’Arcy argues, “The fact that the United Kingdom has decided to leave the European Union has resulted in significant disruption and uncertainty. For the EBA, its staff and their families, a move to Dublin is the least disruptive option.” And, the Irish point out, they all speak English.Amsterdam, on the other hand, is eschewing any talk of rent-free accommodation in its EMA bid. Instead, the Dutch government is promising to spend €250–€300 million on a brand-new HQ and then charge the market rate.Kajsa Ollongren, Amsterdam’s deputy mayor, who is joint leader of the city’s bid, says that rent deals are unnecessary and, instead, talks up the transport links to Schiphol Airport, the assistance to expat EMA staffers that would be on offer, the availability of hotel rooms, and plans to expand places at international schools.But others are banging the rent-free drum. Denmark is promising 20 years free of rents for the EMA within “a new, modern and sustainable building with a superb location less than ten minutes from the airport”.The Danish government says that Copenhagen has a much-vaunted quality of life, adding that a transition plan has been organised to allow the EMA to continue to function fully during the relocation phase. The plan includes “support and counselling to EMA staff and families, and targeted talent attraction”.
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Malta, meanwhile, has pledged to build bespoke 30,000-square-metre, state-of-the-art premises at Smart City if it wins the EMA competition.The premises would be free of rent for at least 15 years, the government says, and there would be grants for furniture and data services. “Within a range of a few metres, the city offers hotels, mid-to-high-end residential sea-view residences and [a] hospital,” the bid document reads. “The city provides cutting- edge infrastructure, unique lifestyle amenities and [a] responsive support system.”Finland is adopting a different tack, emphasising the pharmaceutical expertise in the country, not least because Helsinki is already home to the European Chemicals Agency, which would enable the two agencies “to pool their expertise and resources to create a genuine centre of excellence and, consequently, enhance the global competitiveness” of the EU.“The Helsinki region is already one of the best places in Europe for healthcare and health technology research, development and businesses,” says Jan Vapaavuori, mayor of Helsinki. “Relocating the European Medicines Agency to Helsinki would guarantee a smooth transition for the operations and promote the international competitiveness of Finland.”

Understanding a complicated process

Just how this will all play out on 20 November remains to be seen, particularly as political considerations are bound to be at the forefront of some minds. George Friden, Luxembourg’s EU ambassador appeared to suggest recently that voting alliances might be formed as the process began to unfold.And that process is complicated. In the first round of voting, each country will award three votes for its first preference, two for its second, and one for its third. Any bid securing three points from 14 or more member states will be declared the outright victor.If the threshold is not reached, there will be a second round for the leading three cities, in which each country will get only one vote. If there is still no clear winner, there will be a knockout between the two final candidates.On reflection, maybe it would have been be simpler if an appreciation of fish and chips had been the deciding factor.
Relocate Magazine front cover Autumn 2017
Read more about Brexit and how it is affecting business relocation in the Autumn issue of our magazine
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