Photo credit: Bench Accounting (photo reformatted)
This week, we bring you another post in our “Smooth Landing Frankfurt” series, which consists of informational articles to help Londoners who might be facing an upcoming move to Frankfurt in getting to know the city. (Catch up on the first and second post in the series!)
For today’s blog, we sat down with Dr Gertrud Traud, chief economist and head of research at Helaba. One of her areas of expertise is analysing trends and making economic predictions. Read on to find out what she has to say about the chances of a “hard Brexit” versus the chances of a “soft Brexit”.
EnglishBusiness: Banks from the United Kingdom are already buying up real estate in Frankfurt in order to move their headquarters to Germany, so it seems that Frankfurt will inevitably become the new financial hub in Europe. But isn’t there still a slight chance that the British (along with all other EU Member States) will choose not to go through with Brexit?
Gertrud: Well, technically, yes, there is a chance. But we believe that such a scenario is unrealistic. A lot would have to happen at the negotiating table in order for that to become a reality, and British politicians would have to go against the results of the referendum from 2016. We’ll know more very soon. I believe the British are realising that leaving the EU maybe wasn’t the best idea after all and that the costs associated with such a process are much greater than expected. The talks surrounding a custom trade agreement are a perfect example of this – even now, we are still just speculating about what will happen with regards to trade.
EnglishBusiness: As the chief economist at Helaba, you’re used to predicting various economic and financial scenarios. What is your general prediction for Brexit?
Gertrud: This is exactly what we do – we make predictions about the future based on past and current trends. We published a report in September 2017 called “Financial Centre of Frankfurt: In Pole Position for Brexit Bankers” that takes a closer look at potential Brexit scenarios. We look at three different scenarios: a scenario of “compromise”, one of “conflict” and one of “cherry-picking”. In the first of the three, which has a probability of 60%, a mutually beneficial trade agreement for goods seems to be in order, yet this comes at the expense of many services, particularly financial services. In this scenario, it looks like London would remain the financial hub of Europe. In the second scenario, which has a 30% probability, London will suffer immensely due to various regulations that will hinder the free flow of goods and financial services. This could happen if the United Kingdom decides to leave the negotiating table and split from the Union straight away. In the third scenario, which we deem as having only a 10% probability, the United Kingdom will leave the negotiation table with a lot of benefits and the EU will take on the burden.
EnglishBusiness: That’s fascinating – thank you! Now, would you mind telling us about life in Frankfurt as a banker/economist? What can people expect when they move here?
Gertrud: Frankfurt is a lovely city. It’s actually a “hidden champion” when you look at other banking cities around the world. Take Paris and London as examples: Frankfurt is just a lot more down to earth, yet it’s international and extremely family friendly. In our September 2017 research publication, “Financial Centre of Frankfurt: In Pole Position for Brexit Bankers”, we compare Frankfurt to other European metropolises and reveal that Frankfurt actually has a higher quality of living compared to cities such as Paris, London or Amsterdam. Getting around is also very simple – I work downtown in the banking district and I live outside of the city, yet it doesn’t take me long to get home. Even though Frankfurt may seem like a huge city due to the publicity it gets, it’s really not – it kind of feels like a big village. Bankers’ time is valuable, so living here is definitely a plus.
EnglishBusiness: What’s your favourite place to have lunch in Frankfurt?
Gertrud: I would actually say that the cafeteria at Helaba is my top choice; I eat there quite frequently and thoroughly enjoy it. The food is really good and the service is quick and efficient. Not too many people can say that about their company’s cafeteria, but ours is great!
EnglishBusiness: And what’s your least favourite thing about Frankfurt?
Gertrud: To be honest with you, there are very few, if any, things that I don’t like about Frankfurt. But if I had to point to something that could be better, then I would say that the area surrounding the main train station (the “Bahnhofsviertel”) could do with some improvement. It has come a long way from what it used to be, and people who live here can definitely see a marked change for the better, but improvements need to continue. There are a lot of commuters and tourists arriving at the main train station and they walk through that area on their way to the city, so it would be nice if this area was a little bit more welcoming.
EnglishBusiness: What advice would you give to someone from the UK who is coming to live/work in Frankfurt?
Gertrud: It’s easy to live in Frankfurt and to be international. In many cases, you’ll probably be able to get by without speaking the German language – that’s how international it is here. I would recommend stepping out of your comfort zone a bit, however, in order to get to know the local German culture. There’s so much to discover in and around the Frankfurt area and by experimenting a bit, you’ll see that there’s so much more on offer than meets the eye.
Also, when you compare Frankfurt to London, it’s a much smaller city. If you live in the countryside in England and commute more than an hour each way to and from London, that can put a strain on your private life, because you’re spending so much time on the go. Here, you can live out in the middle of the country (in our Taunus region, for example) and need only 20 minutes by car to travel into downtown Frankfurt. In this sense, you can commute yet also enjoy a good work-life balance.
Frankfurt is also an ideal place for families. A lot of bankers look at the local schools to decide whether to move somewhere. Frankfurt alone has over 30 private and public schools, many of which are international.
EnglishBusiness: Thank you so much! You’ve perfectly described just how wonderful Frankfurt is as a place to live and work.
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