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Interview with Hessian Minister of Economics Tarek Al-Wazir

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Hessian Minister of Economics Tarek Al-Wazir answers questions about Brexit

Tarek Al-Wazir

 

Minister, FrankfurtRhineMain has taken on a new role as a result of the Brexit vote. How is the region positioning itself?

We had hoped that the outcome of the referendum would be different, Brexit is anything but good news for Europe. But now we have to make the best of the situation. And that is a situation in which for any number of companies in Great Britain, in particular in the financial and insurance sectors, access to the EU market is going to be more difficult. What we are telling them is that Frankfurt can be a bridgehead into the EU. Frankfurt is the Eurozone’s leading financial centre; hundreds of foreign banks have representations here, the ECB and Deutsche Börse Group are based here.

These are hard facts. Frankfurt is probably one of the few cities in Europe that at the end of the day can actually benefit from Brexit. We intend to exploit that opportunity.

 

You have already been to London. How do the people you spoke to there view FrankfurtRhineMain?

This is something that is not going to be decided in London alone. We are talking here about international companies from other parts of the world, whose European HQ is currently in the UK capital. For this reason, Volker Bouffier, the Prime Minister of Hessen, has already been to New York to champion Frankfurt as a financial centre. In addition to London, I have also held talks in Tokyo and Seoul. The impression we both got is that Frankfurt is not just on the list in these places, it is often pretty high up it. Of course you come across the same preconceptions everywhere, mostly to do with German taxation and labour laws, but these can easily be refuted with cogent arguments.

 

Given their size, London and Frankfurt are hardly comparable. Nonetheless: How do they differ most, and what do they most have in common?

They are both very international cities, very old and traditional cities with self-confident inhabitants, and they are both global air traffic hubs. As far as differences are concerned, their size is naturally enough the first thing that comes to mind. That, however, gets put into perspective if you consider that some 5.6 million people live in the Rhine-Main commuter belt. Looking at things this way creates a different perspective, which we are promoting accordingly. One difference we are emphasizing is that Frankfurt is not just a financial centre but of course also has links to a very well developed real economy.

 

Which “hard facts” give FrankfurtRhineMain the edge?

First-class transport links, not only in the air but also by road and rail; short distances to several European capitals; an economically strong region with a prime need for financial services; a highly qualified workforce; top-class universities; the best data infrastructure in Germany – and on top of all that office rents that are really low in comparison with other big cities.

 

And the “soft facts”? After all, the Mercer 2017 Quality of Living Rankings has Frankfurt in 7th place, and London in 40th.

We certainly don’t need to be shy here, on the contrary. OK, the “Städel” is not the British Museum and the “Schirn” not the Louvre, but when it comes to culture, FrankfurtRhineMain is no backwater either. Quite the opposite: The region has a wealth of museums, galleries, theatres, concert halls and other cultural facilities. More money is spent per capita on art and culture here than in London and Paris. And the number of bars, restaurants and clubs in Frankfurt is considerable. The fact that the workplace and leisure-time venues are always close at hand here adds to the quality of life. No one has to travel very far to get to the countryside. We also remind people that Frankfurt an extremely international population. If you speak English you won’t have any problems here – there are even more than 30 international schools for the kids.

 

The Brexit discussion is focusing on the financial sector. Could the changes also stimulate other areas of the economy in FrankfurtRhineMain?

As I mentioned, it is not just about banks. By way of example, electronics giant LG recently relocated its European HQ from London to Eschborn, just outside Frankfurt, and I’m expecting other international companies to follow suit. Just think about the close ties between companies from Hessen and England. Investors from Hessen have pumped more than 20 billion euros into branch offices and production facilities in the UK, and there are more than 350 companies in Hessen with British capital behind them, among them well-known brands such as engine manufacturer Rolls Royce, travel company Thomas Cook, and the large automotive supplier GKN Driveline. For companies such as these operating in the real economy, Brexit is going to change quite a lot of things.