Portugal, Jobs, and Banks

I’m back from Portugal, where I spent almost the entire time in dingy bars watching the world cup and drinking heavily with an American mate, joined briefly by a Venezuelan ex-colleague who happened to be transiting in Lisbon airport on his way back to Angola. I saw a tiny bit of Porto and nothing at all of Lisbon, which made me rather glad I’d been there before. That said, I had a great time: catching up with friends and getting drunk in foreign countries is as good a holiday as any, even if it could just as well take place in your basement. The first thing I’ll do today is eat a vegetable: I don’t think I saw one the whole time I was there. I consumed copious amounts of pork, bacon, sausage, potato, and grease though. I was also offered, quite brazenly, all manner of illegal drugs in the street of Lisbon, something which didn’t happen last time.

Anyway, this morning I found this on my Twitter feed:

It’s the second story I find interesting. Leaving aside the high probability that not a single person working at The Times knows the first thing about fruit picking and they’re likely just repeating whatever they’ve been told, since when was a job being fun a requirement to taking one? It’s little wonder we rely on foreigners to pick fruit if the local youth are permitted to refuse jobs and collect welfare because the work being offered isn’t fun enough for them. Perhaps The Times, rather than engaging in Brexiit scaremongering, could have gone into the reasons behind this extraordinary sense of entitlement in today’s unemployed and reflected on their role in supporting the various governments under whose watch it developed.

Incidentally, the chap I was drinking with in Portugal works in banking and, according to him, the giant American banks are shifting thousands of jobs from London to Paris. I asked how they’d cope with the unions and labour laws, and he said they’ve done their homework and they’re simply not going to deal with the unions. If they run into any labour disputes, they’ll simply up and leave. I have every reason to believe what my friend says is accurate, but I suspect these banks have been lured in with promises of special dispensation and once they’re installed the reality is going to hit them right between the eyes. I wonder how long it will be before the CEO of an American bank realises by law he must form a work council:

Any company with at least 50 employees must set up a works council (CE). This committee is composed of representatives of the staff and trade unions, with a mandate of 4 years maximum. It is chaired by the employer. It has economic, social and cultural attributes. To carry out its missions, it has hours of delegation.

We’re not in London any more, Toto.

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17 thoughts on “Portugal, Jobs, and Banks

  1. Oh, to be a fly on the wall when the bank’s CE refuses all meaningful and positive cooperation.

    Same mistake my former Belgian “friends” made when taking over a Paris firm in financial difficulty for a good price (turnover was good, but overheads reached to the moon. And back). Why the good price? Cos none of the locals would touch it with a bargepole despite its good turnover, the CE of the firm in question preventing any restructuring at all being a major part of the cause of this.

    As Other Tim says, things In Foreign really are different.

  2. There are a few thousand jobs shifting over, about 1% of the total at a rough estimate.

    So far they aren’t the most interesting ones – they are primarily related to the middle-office that deals with administration of products (which require licenses) and European bonds (which the EU governments want to administrate ‘onshore’). Probably a bit of regulatory work too.

    If you were looking for a location to do some real finance in Europe, France would certainly not be the place to pick. Germany has Frankfurt, which is a credible place to some degree, but even that wouldn’t work well for anything significant outside of Germany.

    Places like Luxembourg, Amsterdam (very under-rated outside of the sector), maybe even Dublin would be far more preferable for certain things. Even Switzerland, despite not being in the EU.

    What has happened so far is much more about dealing with gaining political credit or getting around protectionism than anything else.

    The EU single market has always been a bit of a joke when it came to services, something that remainers don’t seem to understand. Whether finance, accounting or law, it was always more of a single market ‘for thee and not for me’ type of attitude. Passporting of financial products excepted, it wasn’t all bad.

    Anyway, if the EU gets protectionist about financial services they will pay a price over time. And it’s hard to stop capital flowing freely from/to London unless they want to turn to capital controls, which would be stupid. Probably they will just regulats to move certain jobs onshore, as they are doing with the bond clearing, which will effectively be paid for by those raising finance in the EU.

  3. Per commenter Oblong above, Amsterdam (or The Hague) would be more welcoming places for American bankers than Paris.

    That said, France is improving. Your link to service-public.fr mentions that Macron has replaced an alphabet soup of committees (CE, DP, CHSCT) with a single CSE. Small steps, but the right direction of travel. Assuming Macron wins the next election too, France will enjoy a decade of economic reforms. That can only be good news. I’d better buy myself that ski chalet while I can still afford it.

  4. +1 Oblong

    “The EU single market has always been a bit of a joke when it came to services, something that remainers don’t seem to understand. Whether finance, accounting or law, it was always more of a single market ‘for thee and not for me’ type of attitude. Passporting of financial products excepted, it wasn’t all bad”

    People are terrified of losing something that doesn’t actually exist. Truly bizarre.

  5. The important jobs remain in London because of the network effects – it’s a major global financial centre and everyone does business there. At the margin the good jobs might flow to NYC, which is an even more important centre than London. To replace London with any of the European centres requires that everyone agree to move together – which isnt going to happen. The Germans want it to be Frankfurt, the French Paris etc. Some jobs have and will move. After about 5 years all the people who moved to the continent will all move back to London, except the ones mandated by regulation. No one wants to do business under French or German law anyway.

    The Airbus non-story is another hoax – it’s amazing that the production of wings might end up in China or the US, which are surprisingly not part of the EU.

  6. i am highly sceptical of banks moving significant revenue generating business to paris. Fundamental to the sales and trading businesses is the ability to cut underperforming business lines. Can you imagine trying to just shut down your structured commodity desk quickly whilst staying with French labour laws….

    Good points made above on the single market for services… Doesn’t really exist just ask any banker, lawyer or accountant.

  7. Went to the Algarve a few years ago and you couldn’t move for blokes offering weed. It was quite annoying

  8. Portugal decriminalised drugs in 2001. You’re only allowed to carry small quantities, so while they can’t have Amsterdam-style coffee shops, it’s the perfect environment for dealers to shuffle around the streets with a few g in their pockets to flog to tourists.

  9. If all the jobs in the city moved to Frankfurt, it would have to double in size.
    I know nothing about German Planning law or German Nimbyism, but that’s going to take a boatful of Eritrean bricklayers, Nigerian electricians, Arab telephone engineers, Urdu speaking primary school teachers, etc.

    In short, what can’t happen won’t happen.

  10. >catching up with friends and getting drunk in foreign countries is as good a holiday as any, even if it could just as well take place in your basement.

    Getting drunk in foreign countries, especially with old friends, just adds that extra special bit of fun.

  11. Tim,

    Reading the other comments, mine seem to have a quite different emphasis, but here goes anyway.

    Firstly, it’s nice to meet someone else who considers going abroad and getting drunk as good a holiday as any! Although not a football fanatic, I’m looking forward to the England vs. Panama game this Sunday. Unfortunately, it starts at 8am local time. Of course, you’ve got to watch the game match your mates while having a beer, so I’ve managed to persuade the owner of my local bar to open up specially. I expect I’ll, probably be rather wasted by mid-morning – regardless of the result!

    As for your comments about whether or not picking fruit is fun, hasn’t there been an accepted political consensus in the UK, at least since the 1980s, that anyone who does not wish to work will not be forced to do so?

    Finally, I’m amazed an American bank is moving to Paris. Doubtless they’ve been offered some sweetheart deal to move but, sooner or later, they are going to have to deal with French labour law and the French unions. Assuming they then decide to move to a third location, moving a bank and, crucially, it’s staff and their attendant expertise, is not a five minute job.

  12. I was offered drugs in Lisbon in the 80s so I doubt it has much to do with legalisation. Never happened to my companions either, I could never figure out why I looked like a potential customer.

  13. “I had a great time: catching up with friends and getting drunk in foreign countries is as good a holiday as any, even if it could just as well take place in your basement.”

    A while ago I flew to Buenos Aires with a mate. We sat in our favourite backstreet bar drinking bottles of Patagonia Amber Lager, having the exact same conversation we had earlier in Greenwich, Oslo and Dublin. But you’re right: a change is as good as a rest.

  14. *may be bollocks*
    A banking/ economist type friend of mine holds the theory that a wholesale move of banking, shipping and other grand institutions from the City of London/ UK is unlikely as so much of global business is underpinned by the English Legal system – arbitration clauses in contracts etc making the point that you wouldn’t want to be a litigant in many of the places discussed above.

  15. I am always sceptical about claims that ‘thousands of jobs’ will be moved from London to wherever. We’re talking about moving thousands of people and their families.

    I am even more sceptical about claims that Macron is reforming France.

  16. promises of special dispensation and once they’re installed the reality is going to hit them right between the eyes

    As a former offsider of a certain trade minister in a certain republic, I have seem it happen often. Especially around Vladimir. Crystal clear it was.

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