Philip Revzin, editor and publisher of The Wall Street Journal Europe put forward the American point of view on the future of the City of London at the first Guild of Management Consultants lecture under the new master George Cox.
In a challenging address to consultants and City financial houses Revzin emphasised the need for the City to positively embrace Economic and Monetary Union so that it can continue to compete with other large financial centres around the world and keep its place at the top.
While Frankfurt and Paris have been increasingly cited as the new financial centres of the future, Revzin believes that the City of London will keep its place as a world financial centre as long as it goes along with changes in trading systems when European countries take on EMU.
The decision all the time is a political one not an economic one.
What is holding the UK back, Revzin argued, is the British attitude: fear of Germany and of France and fears about London not being the financial centre, but he points out: “why do we assume that it won’t be a financial centre?”
A worry voiced by City firms is that a Bill Gates-type figure could set himself up as a virtual trading centre in Montana, but essentially all the talent and ideas are in the City of London. He also does not believe the scenario of “when one house goes, the whole house of cards collapses”, that is if the UK does not go in the first EMU wave.
The nub of the difficulty for the City in accepting change and EMU, Revzin believes, is due to the gap between people’s aspirations and knowledge about the reality of EMU. He attributes this gap of knowledge, in part, to the anti-French, anti-German, and anti-European sentiment engineered by the British press.
At the end of the day, he said, in the words of Tip O’Neill: “all politics is local”.
He pointed out that despite the anti-European commentary in the press – particularly the focus on European Union councils that have not been voted into power by the British public – the Maastricht Treaty was written by a council of ministers, finance minsters, and prime ministers from each of the European Union member countries. Besides the latter, he says that all the criteria outlined in the treaty has been met by all the countries.
“You may think, I don’t trust the good David Blunkett; but it is a bit harsh to say that we haven’t voted for those people,” Revzin said. “Maybe, we should have elected a European Government with the brightest politicians, but we haven’t done that. But to say that the Government has all gone native is not accurate. The British have really been conditioned by what the press has said about Europe.”
From an American’s point of view Europe has been a success for 50 years: no wars, co-operation between different nations; for example, drivers do not have to submit a number of forms to go from Europe to Athens.
European economies that were widely differing 10 years ago have come into line, so that Revzin says it is now difficult to make the case that EMU won’t work. Therefore firms should embrace change and make it their own if the City is going to be sanguine.
“EMU is driven by industrialists saying that Japan and US are going to eat our lunch. The City of London will be the financial centre by default, but will not stay like that, should Britain stay out of the EMU by 1 January 1999,” he said.
The Guild of Management Consultants’ City lecture series continues on topics that shape business and society.
10 March 1998; 6.00pm to 8pm
The role of the educator in meeting the challenges of the new millennium, by Chris Woodhead, Her Majesty’s chief inspector of schools.
The lecture will be held at Butchers Hall, 87 Bartholomew Close, London EC1A 7EB.
The lecture is open to all members of the profession. Tickets are available from the Clerk (Miss Doris Goodwin, 106 Turnpike Lane, Croydon, Surrey CRO 5NY (Tel/fax: 0181 688 6119) at a cost of #15, including refreshments.
As the lectures are likely to be over subscribed, please apply early for tickets.