Luxembourg finance boss blasts 'false accusations' of Irish politicians

Eoghan Murphy

The head of Luxembourg's financial lobby group has accused Irish politicians of making "false accusations" against the Duchy as the battle to snare London-based firms looking for a new home after Brexit intensifies.

Nicolas Mackel denied suggestions the Duchy is allowing so-called "brass plate" operations that would give firms token access to the single market.

He was responding to comments made by former finance minister Eoghan Murphy earlier this year which were interpreted as a thinly veiled criticism of Luxembourg.

The chief executive of Luxembourg for Finance told the Press Association: "As long as we can get those sorts of false accusations out of the debate, I think all the other competitive elements are just a normal occurrence of business."

"We make it a point never to talk negatively about our competitors, unlike some of them. I think it's just like in politics - you resort to that sort of communication if you really don't have anything to say about yourself and your strength."

Mr Mackel believes the inflammatory remarks made by Mr Murphy in a Reuters interview - complaining that other European cities were being "very aggressive" and taking part in "creeping regulatory arbitrage", referring to lax rules - were made for "internal political needs".

He added: "Since then, the circumstances in Ireland have changed with a new government and they themselves having been able to make some announcements on companies (choosing Dublin after Brexit).

"So there will be no more need to resort to this sort of communication."

A spokesperson for the Department of Finance said the comment by Mr Murphy "was not a criticism of Luxembourg or any other member state".

They added Mr Murphy had raised a number of issues during a scheduled meeting with European Commission VP Valdis Dombrovskis earlier this including "ensuring there is consistency across EU member states" in applying regulatory standards for financial services.

Mr Mackel acknowledged there was competition to draw business among rival EU financial centres, including Frankfurt and Dublin "to a certain degree", but said Luxembourg felt no pressure to offer special terms and firms were weighing a raft of criteria when choosing their post-Brexit hubs.

In recent months Barclays, Legal & General and Bank of America have revealed plans to base EU-focused operations in Dublin, while the Duchy has gained commitments from the likes of US giant AIG, Northern Trust and insurers RSA and Hiscox.

The Luxembourg for Finance chief said having a dedicated insurance regulator has been a draw for the sector, while most asset managers have boosted activity in the country without fanfare in preparation for Britain's divorce from the EU.

He expects the city to attract approximately 2,000 jobs in the next one to two years as a result.

Mr Mackel said Luxembourg made a conscious decision to hold back from running international roadshows in a bid to win business, eschewing a tactic employed by the likes of Paris and Frankfurt.

He added: "We felt we would not necessarily need to and I think we were actually right.

"Many of the asset management companies that operate out of London have a Luxembourg platform, and were going to very naturally use that Luxembourg platform to consolidate their activities on the European continent.

"The same goes for banks."

However while Luxembourg was gaining business, Mr Mackel said Brexit is still being viewed as a "lose-lose proposition overall".

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