Bruising battle ahead to host EU banking and drug agencies after Brexit

Image Credit

25 April 2017. By Simon Taylor and Max Fillion.

The EU's post-Brexit 27 member states are facing a bitter squabble over the spoils of the UK's departure from the bloc, with national capitals poised to do battle for the right to house the two European agencies now based in London.

In a move designed to minimize the political fallout from a no-holds-barred clash over the agencies, the EU will this week propose criteria for assessing which cities should be home to the prestigious medicine and banking agencies when they move out of the UK.

Donald Tusk, the president of the European Council, will lay out the criteria in an April 29 summit of EU leaders ― a summit which excludes UK Prime Minister, Theresa May. Tusk's decision to bring forward the announcement points to intense rivalry over the relocation of the agencies.

The leaders must now decide where to put the European Medicines Agency, which approves and monitors new medicines, and the European Banking Authority, which sets rules for the EU's banking and finance sectors.

Once the UK leaves the EU, the agencies will have to move to locations within the EU.

Sixteen countries have confirmed to MLex that they are bidding to host the European Medicines Agency, while eight countries have said they want to be the new home of the European Banking Authority.

MLex understands that the criteria to secure the agencies will be proximity to good transport links and closeness to the relevant industry. In the case of the medicines agency, being near to research facilities will also be important.

At first, the decisions on the agencies' new locations were expected to be taken at a later stage of the two-year Brexit process. But the 27 EU members have agreed to make a decision earlier, so that preparations for the agencies' new homes can start.

The final call could be made in May or June.

Battle of the cities

Copenhagen, the Stockholm-Uppsala region and Amsterdam are considered to have strong cases for hosting the much-sought-after EMA.

All three cities have highlighted the proximity to their national medicine agencies and well-regarded universities. Stockholm is also home to the European Centre for Disease Prevention and Control ― although already being home to an EU agency might cut its chances of gaining another.

Barcelona, the capital of Catalonia in Spain, was in second place when the decision to place the agency in London was made, and is said to be the preferred choice of EMA staff.

Italy has proposed Milan as the future of home of both the EMA and the EBA, while France is putting forward the north-eastern city of Lille for the medicines agency following an internal beauty contest.

Warsaw, Valletta, Lisbon, Bucharest and Bratislava are also bidding for the EMA.

Germany would like to host the medicines agency, but hasn't yet decided on a single candidate from a list of Berlin, Bonn and Hanover.

Belgium is proposing three locations — Brussels, Diegem and Louvain-la-Neuve — after failing to reach an agreement among its three regions.

Finland, Latvia and Bulgaria also stated they would like to host the medicines agency, but haven't specified which city they are proposing.

Location, location

Around 900 staff work at the EMA headquarters in Canary Wharf in London. There are fears that many of the agency's highly qualified staff will leave if it doesn't move to a location with similar attractions to London.

This week, senior figures from the world's leading pharmaceuticals companies warned that the agency's crucial role in ensuring the quick and effective rollout of new medicines was under threat by the decision to move the agency out of London.

A letter signed by the research heads of more than 20 companies says that the new location should be as easy to reach as London ― not least because of the 36,000 visits medical experts make to the agency every year.

The location should also be as attractive for staff as London, with guarantees of international schools for workers' children and job prospects for their partners, the letter says.

Dublin, Frankfurt, Luxembourg, Budapest and Prague are seeking to host the European Banking Authority, with Dublin considered to have a strong case because of the city's large financial sector and use of English, the international language of finance.

Wolfgang Schäuble, Germany's finance minister, has suggested merging the functions of the EBA with that of the European Insurance and Occupational Pensions Authority, which is based in Frankfurt.

As the European Central Bank is based there, Germany's bid for the EBA might be weakened.

Luxembourg is home to many EU institutions, which might undermine its case for hosting the EBA in spite of the country's large finance sector.

Decisions on where to locate EU agencies aren't always based on objective criteria. In 2005, the EU's leaders agreed that the Italian city of Parma should be home to the European Food Safety Agency, even though the nearest airport to Parma is an hour's drive away, in Bologna.

Italy won the contest over a bid from Helsinki, after the then French president Jacques Chirac joked that Finland had the worst food in the EU.

There are currently five EU countries that are home to no EU agency: Bulgaria, Croatia, Romania, Slovakia and Cyprus. Normally countries without an agency get priority in decisions on new agencies, but it isn't clear that this will apply to relocating existing bodies.

	Eliot Gao

Receive MLex Editor's Picks in Your Inbox

Complete this form to receive emails from MLex with selected highlights from our global coverage of regulatory risk and opportunity, as well as upcoming events, special reports and exclusive interviews.