8 ms·

Doesn't France have fairly strong labor laws and high taxes? I recall not long ago seeing headlines about "the rich fleeing France". I wouldn't think that woul

Doesn't France have fairly strong labor laws and high taxes? I recall not long ago seeing headlines about "the rich fleeing France". I wouldn't think that would be a big draw for finance types, especially when there are other markets in the EU that seem like they would be more tax friendly (Ireland, Luxembourg, Switzerland, Frankfurt), while still being close enough to other centers of power.

hkmurakami 10y ago
Well the high flying corporate types have always pulled long hours in Paris. The one I know working for LVMH was doing 90+ hour weeks. Maybe there's a "management class" distinction?
- fastbeef 10y ago
  In Sweden, which I image has similar laws, managers (ie. employees with responsibility for other employees, not "team leads") usually have no specified working hours at all. They're trusted and expected to work as much or as little as they need. Most still work ~40 hours/week however.
  - mamadrood 10y ago
    Yep, we have this status, it's called "Cadre" in France, and you don't even have to be a manager, you just need to have a certain autonomy on your work, which basically apply to everyone that work in an office.
adventured 10y ago
Zero chance Paris pulls a large percentage of these bankers. They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy (both in terms of innovation and growth) for decades. In real terms their economy hasn't expanded in nearly 25 years. The centers of power in Europe are still by far in Germany and the UK. French voters have noticed the problem, which is why their Socialist leader recently had a 4% approval rating and the far-right is making big gains. The same disastrous policies that have left them with a broken economy, will keep the London bankers away. There are half a dozen other major cities that will get a look before Paris. Not to mention, France is increasingly an outlier in Europe with a punishing corporate income tax rate (33%). Most of their European competitors have been slashing that rate the past decade plus: Netherlands 25%, Spain 25%, Austria 25%, Sweden 22%, Denmark 22%, Portugal 21%, Finland 20%, UK 20%, Iceland 20%, Czech 19%, Poland 19%, Switzerland 17.9%, Ireland 12.5%. The average across Europe is about 20%. Why would an international bank want to be there, except for local French business purposes?
- camus2 10y ago
  This. Nitpick : it is not a left vs right problem, Sarkozy did next to nothing to make France a better country for entrepreneurship and Fillion who is said to be the next french president was prime minister at that time. France isn't a country for young innovative businesses, it's a country where basically a dozen of big corporations control the entire economy and the rest are just sub-contractors. Neither the left nor the right want to change that. French people will continue voting for high unemployment and stagnation.
  - eli_gottlieb 10y ago
    From the sound of things, what France really needs is to break up its largest companies and implement much stronger competition laws.
- acchow 10y ago
  > They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy Can you elaborate on the bad labor laws?
  - throwaway1892 10y ago
    I think he meant the labor laws are protecting more the employee than the employer, notably on the firing part. So, as far as some theories go, if it is hard to fire employees, employers will be more reluctant to hire, reducing worker mobility. But I only have a small experience of the consequence of our current labor laws (which are very hard to change, the current gov tried last year and got massive protests for their trouble). Edit: Also the employment taxes (the one paid by employers) are very high in France (half of the salary +/-).
- vidarh 10y ago
  France has a large percentage of EU bankers already. Only Frankfurt and London are at a similar level as Paris in the EU for banking today, and if London ceases to be a viable alternative (due to passporting etc. post brexit), then Paris will end up taking a lot of that business for the simple reason labour laws and taxes are not the only things the banks need to care about, but also where their employees are willing to live and work. My ex works in HR at executive level at a major investment bank. French labour laws etc. never comes up when they consider where to staff up/down (and they do continuously). As for corporate taxes, no investment bank has a problem finding schemes to shift profits around. > They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy (both in terms of innovation and growth) for decades. Their GDP per capita is largely moving in lockstep with the UK and Germany, despite far fewer hours worked per year for the average French worker. As it turns out there's very little evidence that these "bad labour laws and quit high taxes" have much impact on growth. > Not to mention, France is increasingly an outlier in Europe with a punishing corporate income tax rate (33%). In line with Germany. > The average across Europe is about 20%. Why would an international bank want to be there, except for local French business purposes? They are already there for purposes other than "local French business purposes". Many international banks have similar numbers of staff in Paris as in London.
JumpCrisscross 10y ago
This goes beyond strong labor laws and taxes. "In bank-based financial systems such as Germany and Japan, banks play a leading role in mobilizing savings, allocating capital, overseeing the investment decisions of corporate managers, and in providing risk management vehicles. In market-based financial systems such as England and the United States, securities markets share center stage with banks in terms of getting society’s savings to firms, exerting corporate control, and easing risk management." [1] France is a bank-based economy. Britain is market based. London's financial dominance pre-dates the EU for good reasons. [1] http://documents.worldbank.org/curated/en/259341468739463577/126526322_20041117172106/additional/multi-page.pdf http://documents.worldbank.org/curated/en/259341468739463577... Introduction, Table 11, Table 12 Postscript: "• In higher income countries, stock markets become more active and efficient relative to banks. There is some tendency for national financial systems to become more market oriented, as they become richer. • Countries with a Common Law tradition, strong protection of shareholder rights, good accounting regulations, low levels of corruption, and no explicit deposit insurance tend to be more market-based. • Countries with a French Civil Law tradition, poor protection of shareholder and creditor rights, poor contract enforcement, high levels of corruption, poor accounting standards, restrictive banking regulations, and high inflation tend to have underdeveloped financial systems." page 5
- Fnoord 10y ago
  Not sure what you're implying. The US and UK have low levels of corruption; France, Germany, Benelux have high levels of corruption? ¯\_(ツ)_/¯ Lets first have a look where Common Law exists [1]. OK, that's pretty easy: It is FVEY plus some islands. Now lets have a look at the Corruption Perception Index [2] (alternatively, just check the picture at [3]). The UK and US are at place 12 and 17 respectively. The top 10 is comprised of: Denmark, Finland, Sweden, New Zealand, Netherlands, Norway, Switzerland, Singapore, Canada, Germany. I count 2 common law (New Zealand, Canada), and at least 7 Civil Law (I'm not including Singapore because I don't know what kind of law system they have; the list is including that pesky Germany who according to your source have high corruption). I fail to see your pattern. [1] https://upload.wikimedia.org/wikipedia/commons/9/92/Map_of_the_Legal_systems_of_the_world_%28en%29.png https://upload.wikimedia.org/wikipedia/commons/9/92/Map_of_t... [2] https://en.wikipedia.org/wiki/Corruption_Perceptions_Index https://en.wikipedia.org/wiki/Corruption_Perceptions_Index [3] https://upload.wikimedia.org/wikipedia/commons/b/b4/Transparency_international_2015.png https://upload.wikimedia.org/wikipedia/commons/b/b4/Transpar...

hkmurakami 10y ago

Well the high flying corporate types have always pulled long hours in Paris. The one I know working for LVMH was doing 90+ hour weeks. Maybe there's a "management class" distinction?

fastbeef 10y ago
In Sweden, which I image has similar laws, managers (ie. employees with responsibility for other employees, not "team leads") usually have no specified working hours at all. They're trusted and expected to work as much or as little as they need. Most still work ~40 hours/week however.
- mamadrood 10y ago
  Yep, we have this status, it's called "Cadre" in France, and you don't even have to be a manager, you just need to have a certain autonomy on your work, which basically apply to everyone that work in an office.

adventured 10y ago

Zero chance Paris pulls a large percentage of these bankers. They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy (both in terms of innovation and growth) for decades. In real terms their economy hasn't expanded in nearly 25 years. The centers of power in Europe are still by far in Germany and the UK. French voters have noticed the problem, which is why their Socialist leader recently had a 4% approval rating and the far-right is making big gains. The same disastrous policies that have left them with a broken economy, will keep the London bankers away. There are half a dozen other major cities that will get a look before Paris. Not to mention, France is increasingly an outlier in Europe with a punishing corporate income tax rate (33%). Most of their European competitors have been slashing that rate the past decade plus: Netherlands 25%, Spain 25%, Austria 25%, Sweden 22%, Denmark 22%, Portugal 21%, Finland 20%, UK 20%, Iceland 20%, Czech 19%, Poland 19%, Switzerland 17.9%, Ireland 12.5%. The average across Europe is about 20%. Why would an international bank want to be there, except for local French business purposes?

camus2 10y ago
This. Nitpick : it is not a left vs right problem, Sarkozy did next to nothing to make France a better country for entrepreneurship and Fillion who is said to be the next french president was prime minister at that time. France isn't a country for young innovative businesses, it's a country where basically a dozen of big corporations control the entire economy and the rest are just sub-contractors. Neither the left nor the right want to change that. French people will continue voting for high unemployment and stagnation.
- eli_gottlieb 10y ago
  From the sound of things, what France really needs is to break up its largest companies and implement much stronger competition laws.
acchow 10y ago
> They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy Can you elaborate on the bad labor laws?
- throwaway1892 10y ago
  I think he meant the labor laws are protecting more the employee than the employer, notably on the firing part. So, as far as some theories go, if it is hard to fire employees, employers will be more reluctant to hire, reducing worker mobility. But I only have a small experience of the consequence of our current labor laws (which are very hard to change, the current gov tried last year and got massive protests for their trouble). Edit: Also the employment taxes (the one paid by employers) are very high in France (half of the salary +/-).
vidarh 10y ago
France has a large percentage of EU bankers already. Only Frankfurt and London are at a similar level as Paris in the EU for banking today, and if London ceases to be a viable alternative (due to passporting etc. post brexit), then Paris will end up taking a lot of that business for the simple reason labour laws and taxes are not the only things the banks need to care about, but also where their employees are willing to live and work. My ex works in HR at executive level at a major investment bank. French labour laws etc. never comes up when they consider where to staff up/down (and they do continuously). As for corporate taxes, no investment bank has a problem finding schemes to shift profits around. > They do have a lot of bad labor laws and quite high taxes, both of which have contributed to France having a very stagnant economy (both in terms of innovation and growth) for decades. Their GDP per capita is largely moving in lockstep with the UK and Germany, despite far fewer hours worked per year for the average French worker. As it turns out there's very little evidence that these "bad labour laws and quit high taxes" have much impact on growth. > Not to mention, France is increasingly an outlier in Europe with a punishing corporate income tax rate (33%). In line with Germany. > The average across Europe is about 20%. Why would an international bank want to be there, except for local French business purposes? They are already there for purposes other than "local French business purposes". Many international banks have similar numbers of staff in Paris as in London.

JumpCrisscross 10y ago

This goes beyond strong labor laws and taxes. "In bank-based financial systems such as Germany and Japan, banks play a leading role in mobilizing savings, allocating capital, overseeing the investment decisions of corporate managers, and in providing risk management vehicles. In market-based financial systems such as England and the United States, securities markets share center stage with banks in terms of getting society’s savings to firms, exerting corporate control, and easing risk management." [1] France is a bank-based economy. Britain is market based. London's financial dominance pre-dates the EU for good reasons. [1] http://documents.worldbank.org/curated/en/259341468739463577/126526322_20041117172106/additional/multi-page.pdf http://documents.worldbank.org/curated/en/259341468739463577... Introduction, Table 11, Table 12 Postscript: "• In higher income countries, stock markets become more active and efficient relative to banks. There is some tendency for national financial systems to become more market oriented, as they become richer. • Countries with a Common Law tradition, strong protection of shareholder rights, good accounting regulations, low levels of corruption, and no explicit deposit insurance tend to be more market-based. • Countries with a French Civil Law tradition, poor protection of shareholder and creditor rights, poor contract enforcement, high levels of corruption, poor accounting standards, restrictive banking regulations, and high inflation tend to have underdeveloped financial systems." page 5

Fnoord 10y ago
Not sure what you're implying. The US and UK have low levels of corruption; France, Germany, Benelux have high levels of corruption? ¯\_(ツ)_/¯ Lets first have a look where Common Law exists [1]. OK, that's pretty easy: It is FVEY plus some islands. Now lets have a look at the Corruption Perception Index [2] (alternatively, just check the picture at [3]). The UK and US are at place 12 and 17 respectively. The top 10 is comprised of: Denmark, Finland, Sweden, New Zealand, Netherlands, Norway, Switzerland, Singapore, Canada, Germany. I count 2 common law (New Zealand, Canada), and at least 7 Civil Law (I'm not including Singapore because I don't know what kind of law system they have; the list is including that pesky Germany who according to your source have high corruption). I fail to see your pattern. [1] https://upload.wikimedia.org/wikipedia/commons/9/92/Map_of_the_Legal_systems_of_the_world_%28en%29.png https://upload.wikimedia.org/wikipedia/commons/9/92/Map_of_t... [2] https://en.wikipedia.org/wiki/Corruption_Perceptions_Index https://en.wikipedia.org/wiki/Corruption_Perceptions_Index [3] https://upload.wikimedia.org/wikipedia/commons/b/b4/Transparency_international_2015.png https://upload.wikimedia.org/wikipedia/commons/b/b4/Transpar...