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France is actively seeking to punish the City of London during Brexit, according to a leaked memo

Will Martin
The financial district of La Defense is seen at dusk near Paris, France, January 5, 2017.

REUTERS/Christian Hartmann

LONDON — France is seeking the hardest possible Brexit to take advantage of the disruption this would cause to the City of London, a leaked memo suggests.

The memo, published in the Mail on Sunday, was written by Jeremy Browne, the City's envoy to the EU, after a meeting with senior French officials at the country's central bank, the Banque de France at the beginning of July.

"The meeting with the French Central Bank was the worst I have had anywhere in the EU. They are in favour of the hardest Brexit. They want disruption. They actively seek disaggregation of financial services provision," Browne wrote to the Treasury, MPs and financial firms.

"The clear messages emanating from Paris are not just the musings of a rogue senior official in the French government or central bank. France could not be clearer about their intentions," Browne continues.

"They see Britain and the City of London as adversaries, not partners."

Since the Brexit vote, Paris's financial hub has been the most vocal in lobbying banks and other financial services firms to move business from London to the city, with lobby group Paris Europlace frequently sending delegations to London and hosting events in the city.

Cities across Europe are lobbying to attract relocating banks, insurers, and investment funds once Britain almost inevitably loses the right to passport financial services across the EU after Brexit.

The passport is a system of common financial rules that allow UK based financial firms to access customers and carry out activities across Europe. The Financial Conduct Authority (FCA) said last year that 5,500 UK companies rely on passporting rights, with a combined revenue of £9 billion.

Without it, doing business in the EU from London will be very tricky, so plans are being put in place for establishing or extending European offices to cope with the looming rule changes.

Paris has consistently argued, however, that it wishes to be collaborative in the Brexit process, and sees any staff movements out of London as a rebalancing of the continent's financial centres.

In an interview with Business Insider in May, Arnaud de Bresson, chief executive of Paris Europlace stressed that the aim of his organisation was to work with the City of London, rather than against it, to promote Europe as a competitive financial marketplace.

"What we see is that it [the movement of finance workers] will not be from London to one financial centre in the EU, it will be a distribution in the different centres," he said.

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