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Le Pen is flightier than the Tories

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By Craig McGlashan
02 Feb 2017

The Conservative UK government may be undermining London’s status as Europe’s pre-eminent financial hub with its seeming determination for a clean/hard/sharp/solid Brexit, but potentially more momentous events across the Channel could soon see financiers flocking in the other direction.

One senior Paris-based banker told GlobalCapital this week that if Marine Le Pen wins this year’s French presidential election — a not impossible prospect that’s getting less and less impossible all the time (see cover story) — he would pack up his valise and move to the UK.

That came as a leaked European Union report obtained by the Guardianwarned that the European Commission should find a “workable” deal in its negotiations with the UK that protects the City — otherwise other European countries’ economies could be hit.

In any case, should capital market participants be particularly worried about a Le Pen victory? There was all manner of doom mongering about the chaos that would ensue after a Donald Trump victory — up until the point he won the election. Markets have responded pretty well after that, with primary debt markets enjoying a record January.

While the marriage of reality to rhetoric in a Le Pen presidency remains a hypothetical situation for the moment, who’s to say there won’t be a ‘Pen Play’ to match the ‘Trump trade’?

Of course, any boon to preserving London’s status as the number one place for euro financing would likely be offset by the almost certainty that the currency would implode shortly after a Le Pen victory.

Still — a return to the drachma should help Greece finally return to debt sustainability. There’s always a silver lining.

By Craig McGlashan
02 Feb 2017