The whole of Europe – Britain included – would suffer if the EU lost its biggest financial centre, according to Pierre Gramegna. Alex Matchett reports
The finance minister of Luxembourg has urged the UK to stay in the EU, saying he 'wouldn't like to lose that ally' in driving Europe's financial services forward.
Speaking yesterday in the City of London's Guildhall, Pierre Gramegna said: 'As finance minister I dearly wish that the United Kingdom stays inside the European Union. London is the largest financial centre in Europe, arguably the largest in the world and it's an asset for our continent to have that onboard instead of having it outside.' He was speaking to a thousand-strong assembly of City fund managers, asset managers and lawyers at the Association of the Luxembourg Fund Industry's annual conference.
Gramegna's comments come as the Centre for the Study of Financial Innovation revealed 73 per cent of City workers would definitely (49 percent) or probably (24 per cent) vote to stay in the EU.
In the interview with the BBC's Kamal Ahmed, Gramegna also suggested the EU would not avoid a 'Brexit' at any cost: 'What is not up for negotiation is the four pillars, the four freedoms, the four liberties which are free movement of people, of capital, of goods and of services.
’If Britain wants to renegotiate one of these, it's a very difficult way of starting the negotiation because in fact when we talk about a financial centre it's all of those.'
Gramegna was clear the benefit of staying in the EU was mutual: 'Also for the City, being inside Europe is an extraordinary advantage because it passports-in possibility which is at risk if you leave it.'
The former ambassador to Japan and South Korea highlighted the parallels between the duchy's economy and that of the UK, and the leverage they could have at a time when the financial services industry is being pressured by Brussels: 'When you have this discussion about being attractive to foreign investors and having the right set of regulation rules, well, you need an advocate for cross-border banking, for cross-border financing, and the two strongest advocates of that within the EU are the UK and Luxembourg.
’The complementarity that we have as financial centres, as illustrated today, shows that we really help each other and I wouldn't like to lose that ally.'
Luxembourg's fund industry now manages ’3.4 trillion worth of assets and its economy grew 3 per cent last year while the UK's grew by 2.6 per cent; in both cases Gramegna believes EU membership has been key: 'If I really had to look at the situation of this country over the last couple of years I think that the four liberties have been serving the British economy very well.
’It has been growing quite a lot and has been able to grow because it has found additional workers and immigrants. The whole situation needs to be highlighted, the way this free flow of people, capital and goods and services in fact has benefited the United Kingdom.'