'Get ready for London job moves' Lagarde tells EU
European financial centres must gear up for a mass relocation of companies and jobs from London after Brexit, according to the International Monetary Fund chief.
25 June 2018Christine Lagarde told an Irish Central Bank conference in Dublin that the EU27 needed to enhance its regulatory and supervisory capacities to cope with the likely influx of firms from the City of London.
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Ms Lagarde accepted that integration brought its own problems. “Several of the countries hit hardest during the global financial and euro area crisis saw their income growth fall significantly behind that of their peers,” she said, noting that many countries were only now recovering to pre-crisis levels.“It has been a complicated journey, full of difficult moments – but in each step, we have learned valuable lessons at the age of 20, the euro area is more mature – battle scarred yes, but also stronger and ready to move forward.”Ms Lagarde told the conference that she believed the EU should take to introduce greater fiscal risk-sharing while reducing underlying fiscal risks. “Greater risk-sharing combined with larger national buffers would allow countries to avoid having to raise taxes and cut spending when the next downturn comes,” she said.
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IMF calls for regulatory and supervisory improvements in Europe
“In the near-term, it is critical to ensure that regulatory and supervisory capacities are prepared for the influx of financial firms that will move to continental Europe – and Ireland – as a result of Brexit,” Ms Lagarde said.“The euro area needs truly integrated financial and capital markets that allow companies to raise financing across borders more easily and support investment.“We meet at a moment when the EU and euro area are in the midst of difficult decisions about their future. Populist movements – from Brexit to the recent Italian elections – have called into question the value of European integration.”Related stories:
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Ms Lagarde accepted that integration brought its own problems. “Several of the countries hit hardest during the global financial and euro area crisis saw their income growth fall significantly behind that of their peers,” she said, noting that many countries were only now recovering to pre-crisis levels.“It has been a complicated journey, full of difficult moments – but in each step, we have learned valuable lessons at the age of 20, the euro area is more mature – battle scarred yes, but also stronger and ready to move forward.”Ms Lagarde told the conference that she believed the EU should take to introduce greater fiscal risk-sharing while reducing underlying fiscal risks. “Greater risk-sharing combined with larger national buffers would allow countries to avoid having to raise taxes and cut spending when the next downturn comes,” she said.
IMF proposes rainy-day fund
The IMF recently introduced proposals for a so-called rainy-day fund for the euro zone: a so-called central fiscal capacity. Ms Lagarde said such a fund could act as a buffer against future shocks, but acknowledged there were other proposals on the table.“But no matter which proposal is eventually adopted, every country has a responsibility to comply with common fiscal rules and reduce public debt in places where it is too high,” she said. Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory ©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.
