Location, Location, Location: It Does Matter Where EU Institutions Are Based

The London-based European Medicines Agency (EMA) and the European Banking Authority (EBA) will have to be relocated before the UK leaves the EU. Where they end up going will reveal a lot about European politics.

First, there is simple question of geographic balance. EU institutions are located disproportionately in Francophone Western Europe. Strasbourg, Brussels and Luxembourg host the most important institutions, from the Court of Justice, the Parliament, Commission, Presidency and Council of Ministers.

Frankfurt won the seat of the European Central Bank in 1998 as it became apparent that the UK would not be joining the Euro currency, but London did pick up the Medicines and Banking regulators in recognition of the UK’s strengths in these sectors.

But the EU is a now continent-wide project, and many Eastern European countries are understandably arguing that a better balance needs to be struck. The Slovak and Greek capitals are arguing that relocating the EMA to Bratislava or Athens will help address this imbalance.

But second, and in opposition to the geographic argument, is the case for the institutions to be based near the industries that they regulate. This was the impetus for London to host the EMA and EBA, with the largest agglomeration of pharmaceuticals and financial services in Europe.

Leading the industry argument are Amsterdam and Milan, both of which are significant pharma and banking hubs. Dublin too is making a pitch on the industry argument, particularly if firms relocate from London to Ireland, which offers both Common Law and an English language environment.

Then there is the question of recruiting and retaining staffing and talent for the organisations. A recent survey of the EMA’s staff found that the majority of staff say they will refuse to relocate to Eastern Europe. Workers in same-sex marriages have expressed concern that they will lose rights if they move to the East. This highlights a broader cultural split in the European project: how to accommodate the different attitudes towards and legal statuses of LGBT people in the East and the West. Indeed, even the broader question of how liberal Europe should be is at stake.

The relocation decisions are due on 22 November 2017 – three weeks from the time of writing. Twenty-three cities have thrown their hats in the ring, and there is no way of predicting the outcomes. But the decisions will send powerful signals about the EU and the political relations between the Member States.