Ireland complains to EU over countries’ race to regulatory bottom over Brexit

Dublin complains to the Commission over rivals’ ‘dangerous competition.’

Ireland has told the European Commission it is being undercut by other countries seeking to attract financial firms looking for European bases outside London after Brexit, Reuters reported Wednesday.

Eoghan Murphy, the minister in charge of promoting Dublin’s financial center, said other EU cities are being “aggressive” in trying to lure companies, creating “dangerous competition.”

Financial firms are seeking to establish bases in other EU cities such as Frankfurt, Paris, Dublin and Luxembourg, to maintain access to the single market.

Murphy said various sources told him companies are being offered incentives such as lax financial regulations in a bid to get them to move.

“They are offering a back door to the single market, without the requirement to have capital to back up their entities in the EU,” Murphy said.

He did not name the worst offenders, but Reuters reported Luxembourg was the source of greatest concern.

Murphy said he had expressed his concerns over “creeping regulatory arbitrage” to the Commission’s vice president for financial services, Valdis Dombrovskis.

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