Amsterdam Seeks Brexit Business Despite Bank Bonus Cap

  • Deputy mayor acknowledges bonus cap remains a hinderance
  • She says in interview the city has a great deal more to offer

Deputy Mayor of Amsterdam Kajsa Ollongren on July 18.

Photographer: Jasper Juinen/Bloomberg

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Amsterdam is seeking to lure companies and the European Medicines Agency as Brexit drives them across the Channel, even as a Dutch cap on bank bonuses keeps financial firms away. 

The city’s top economic official is in “serious conversations” with 60 companies, among them broadcasters and services firms, as they seek to lock in prime locations.

“Companies that need to spread out from London into other member states don’t want to be standing at the back of the line,” Kajsa Ollongren, 50, Amsterdam’s deputy mayor in charge of economic affairs, said in an interview at the mayor’s official residence this week.

While Frankfurt is rapidly becoming the location of choice for banks like Morgan Stanley and Citigroup Inc., the city of bicycles and the home of the world’s oldest stock exchange -- which in recent years has drawn the likes of Netflix and Salesforce -- sees itself as better positioned than other European cities to attract companies. That effort pits it against Frankfurt, Paris, Dublin and others, all of which are offering incentives and making pitches on everything from infrastructure to international schools.

“The fact that you can cycle here and don’t have to sit in a very hot subway” is an added plus for a country that can draw on its deep talent pool, is centrally located in Europe and has the right infrastructure, Ollongren said.

“In which other European capital can you get from the airport to your office by train within seven minutes?” she asked, making her case for the EU medical agency to be based in the city.

Banks that would have been lured by these elements have been deterred by the bonus cap, Ollongren acknowledged.

Bonus Cap

The Dutch cap stipulates that banks can award a maximum bonus of 20 percent of the fixed annual salary, making the Netherlands stricter than other European countries. It has prompted the Dutch employers’ association VNO-NCW to call on politicians to change it.

Ollongren’s party -- the progressive centrist D66 –- is one of the four parties in discussions to create a coalition government after the general elections on March 15. She said she had been asked by colleagues whether the bonus cap puts the Netherlands at a disadvantage. The honest answer is “yes,” she said, adding that people discussing the new coalition will determine whether they want to create a level playing field.

Still, she warned against focusing too much on the banks, pointing out that “the City will remain the City.”

“London, the City, will not empty out,” she said. “It’s not like all those banks will pick up their things and go somewhere else in Europe. ”

City Battle

Amsterdam would like to focus on the quality of the businesses it can lure, she said, paying more attention to the value they’ll add to the local economy and the kind of jobs they’ll create.

While the jostling for Brexit businesses and jobs has created a sense of cities battling against each other, Ollongren said it should not be seen as “some sort of match.”

Kajsa Ollongren

Photographer: Jasper Juinen/Bloomberg

“I’m not sure you should look at it like that,” she said. “At the end of the day, companies pick the place that suits them best. And that is often Amsterdam.”

Amsterdam’s lobbying for the European Medicines Agency puts it in competition with other regional cities like Bonn in Germany and Porto in Portugal.

Ollongren is not only promising a seamless transition -- in which the agency can close its doors in London on Friday and open shop in Amsterdam on Monday -- but also a to-be-built office in the Zuidas area of the city, home to companies including ABN Amro Group NV and Akzo Nobel NV, that has “5,000 hotel rooms in the vicinity.”

Trump Effect

If EMA comes to Amsterdam, Ollongren has vowed to offer a special solution at international and European schools for the children of the 900 employees the agency would bring.

One other opportunity for the city? The uncertainly after Donald Trump’s election in the U.S. The official pointed to a recent video in which a Silicon Valley family explains -- in song -- why it’s moving to Amsterdam. 

“This is more Trump-related, the climate in the U.S. with people saying: I’d rather be in Amsterdam, with its tolerance,’’ she said. “What I mean is, we shouldn’t stare ourselves blind on Brexit; there’s also the U.S.’’

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