EU referendum: Frankfurt poised for a Brexit boom
- 10 May 2016
- From the section Business
It is hard to find someone in Frankfurt who will say they want Britain to leave the EU - but many are already planning to take advantage if it does.
A "leave" vote would oblige the banks, insurance companies and other financial businesses that use London as a base for their European operations to move some of their business into the eurozone.
Frankfurt, Germany's financial capital, hopes to be top of their list of possible new homes.
"In the unlikely event that the UK were to leave, Frankfurt would clearly be a main beneficiary," says Hubertus Vaeth, who runs Frankfurt Main Finance, the industry association for the city's banks.
"Though Frankfurt would benefit from such a move, the loss would be the EU's as a whole. So we will not want to benefit at the expense of the entire EU."
Nonetheless, Dr Vaeth says, people are getting ready. "Quite a few actors have prepared. Don't ask me for names, because nobody wants to be quoted on that - but we do know from quite a few players that they have plans for such an unlikely event," he says.
"You have to plan for all sorts of events, and even the unlikely ones."
Earlier this year, three former UK ambassadors to the EU warned that other financial centres in Europe would "not be sentimental in seeking to challenge the City's prominence".
It doesn't follow that the Frankfurt is actively hoping for Brexit. It's a cosmopolitan city and home to one of the European project's great institutions, its central bank. The disruption that Brexit would cause is likely to be keenly felt here.
German business is strongly anti-Brexit. A recent survey by the Bertelsmann Stiftung think-tank found that 83% of German businesses opposed it.
There is no guarantee that Frankfurt would be the unrivalled beneficiary.
HSBC has already said it would move its business to Paris, where it owns a French bank. Luxembourg would also be in the running. And Dublin would have the appeal of being an English-speaking city - with a better reputation than Frankfurt as a place for fun.
Rising house prices
Frankfurt's dull image is perhaps not entirely fair. It has art museums, an opera house, and a top-flight football team. Twelve of the city's restaurants have been awarded a coveted Michelin star (although admittedly London has more than five times that number).
Frankfurt is in many ways an easier city to live in. Residents are spared the misery of London's crowded, expensive commutes, and its well-connected airport is just a 15 minute ride from the centre by taxi.
Perhaps most appealingly, a penthouse apartment fit for a Master of the Universe would cost less than a third of an equivalent property in London, says David Schmitt of Engel and Voelkers, a high-end estate agent based next to the old Opera House.
His business is likely to be a major beneficiary if Brexit does come.
"I think for us there will be an upside," Mr Schmitt says, given that more bankers means demand for homes.
"I think prices will go up by 10 or 15% because the market is very tight already. There is high pressure on the real estate market, and this makes the pressure even higher."
Of course, rising house prices are not universally hailed as a good thing, especially in a country which doesn't share the British obsession with owning the roof over one's head.
"For people trying to get on the property ladder, that might not be an advantage," says local businessman Martin Frank.
Mr Frank runs SchuF, a small family-owned valve-making firm he calls the "epitome" of the Mittelstand - the manufacturers that many regard as the bedrock of German industrial might.
His company has a factory in Devon, and he worries that Brexit might lead to tariffs being imposed on UK exports to Europe and vice versa, harming his business.
He also fears Britain's departure would rob the EU's decision-making process of a strong advocate for reform and liberalisation.
"Europe is definitely divided into different camps, and Britain is definitely in the reforming camp," Mr Frank says. "So I think Germany, which is probably more in the reforming side than it used to be, would not welcome Britain leaving."
A "leave" vote would bring great uncertainty - and the size of the potential boost to Frankfurt is far from clear. But the possible opportunity has certainly been noticed.
"This is a 'get things done' city," Dr Vaeth says. "Housing obviously would be a little bit of a challenge, but housing in London is even more of a challenge.
"So relatively speaking would it be a problem? No, clearly not. The infrastructure is in place, the skills are in place, the technical infrastructure is there. Housing? Offices? What needs to be done will be done - fast."
Few in Frankfurt want Brexit, but it seems they are ready if it comes.