Prospect of post-Brexit boom sparks worry as well as celebration in Frankfurt
The prospect of bankers pouring into Frankfurt from post-Brexit Britain has worried local residents anxious about the effect on an already dire housing shortage but also energised leftist groups looking to advance their anti-capitalist ideology.
At least 10,000 financial jobs are expected to move out of London when Britain leaves the European Union in March 2019, a number that could balloon to 75,000 over the longer term. The majority of banks, including Goldman Sachs, say they expect to move to Frankfurt.
Frankfurters looking forward to the influx say they hope a free-spending clientele will breathe new life into what is often seen abroad as a dull provincial capital.
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Other residents are worried about rents and housing stock in the city, given that many in the lower-to-middle income range already have a hard time finding a home, however.
Among Germany`s active and well-established leftists, who have described the big banks as "ticking time bombs", groups like "Blockupy" and the Interventionist Left are plotting strategies for disruption.
It`s a reminder that while some of the world`s legendary bankers - the Rothschilds, the Warburgs, even the founder of Goldman Sachs, Marcus Goldman - were born in Germany, so was Karl Marx.
"We view the concentration of banks in Frankfurt with concern," said a Blockupy spokesman who identified himself as Thomas Occupy. "For some members, Goldman Sachs is like a red rag to a bull."
Rents in Frankfurt have risen by up to 37 percent since 2009, according to three private data providers, triple the pace for all of Germany, according to Bundesbank estimates. Frankfurt planning officials estimate the city has a shortfall of 40,000 homes even before the Brexit wave hits.
Private developers plan 20 new high-rise buildings within five years but are aiming those at wealthy tenants, with asking prices of 4 million euros for some apartments.
By comparison, state-owned ABG Frankfurt Holding, which builds affordable housing, completed just 445 apartment units last year. It plans to build thousands more in the coming years but they will arrive too late to relieve the immediate crunch.
"The forecasts were wrong. We had expected the population would stagnate," said Mark Gellert, a spokesman for the city`s planning division. Instead, it has been growing, adding more than 6,000 people in the first six months of this year.
"That`s why we fell behind," he said.COCKTAIL MENTALITY
Proponents of the arrivals, including Thomas Schaefer, finance minister for the state of Hesse that is home to Frankfurt, argue they will boost the economy and tax revenues.
Restaurant and club entrepreneur Madjid Djamegari anticipates the newcomers will be more interested than the locals in going out during the week, for example.
"The Germans don`t have the after-work cocktail mentality. But people are coming who have different standards, who are willing to pay for service," said Djamegari, whose latest project is a pop-up bar in a former bank office building.
With a population of just 736,000, against London`s 8.8 million, and an average annual pre-tax salary of 43,600 euros ($51,300), Frankfurt may also be affected by the influx in less congenial ways, tenants rights groups fear.
Rolf Janssen, head of the Frankfurt tenants` protection association, said his group receives hundreds of calls each week from people worried about evictions or rising rents. Some are in tears and say they have to save on food and clothes to pay the rent.
While German law means it is not possible to easily evict tenants or increase rents sharply, Janssen said, there are loopholes and mistrust between residents and owners has increased in recent years.
Callers say some owners abruptly embark on noisy construction work to intimidate tenants to leave in order to renovate and charge new occupants more, he said.
"Brexit bankers ... trump ordinary tenants," he said.
Michael Mueller, a far Left Frankfurt official who sits on a planning committee preparing for Brexit, is attempting to prevent the state selling further property for high-rise towers.
"I`m worried Frankfurt will turn into ... a millionaire`s ghetto," he said. "WE`RE HALF OF THIS TOWN"
The Left Party, which has its roots in east Germany`s communism, took roughly one tenth of the seats in the parliament in the last election on Sept. 24, pledging in its manifesto to renationalise the banks and "break their power".
Far-left groups hope the tenants` concerns could win them even more support.
Blockupy, which staged violent street protests against the European Central Bank when its new offices opened in 2015, and the Interventionist Left, which helped organise protests against the G20, are weighing their next moves.
"People are being pushed out of the city centre," said Interventionist Left activist Felix Wiegand.
"On the other hand, you see the SUVs and those people who have taken over the city as it is were their own. The city`s policy of favouring the rich is infuriating people."
Far-left groups said they might hold protests at the opening of one of Frankfurt`s new office towers and tenant action groups are starting a petition for affordable housing.
Their campaign poster features a collage of photographs of citizens with the slogan: "We`re half of this town".
Others may be willing to take more drastic steps.
"There is an increasing readiness to act and willingness to resort to violence at the left wing extremes in recent years," said Klaus Schroeder, an expert in left-wing extremism at the Free University of Berlin.
"The left believe that they are using violence to achieve a better world and that the banks are the first that have to be eliminated."
At the protest against the ECB, 7,000 protesters took to the streets, setting police cars on fire and blocking roads with burning stacks of tyres. More than 500 were arrested.
Deutsche Bank, Germany`s flagship bank, may offer a taste of what its new neighbours in the financial district can expect.
Since 1990, on the first Thursday of every month, former priest Gregor Boeckermann has gathered with about a dozen others at the bank`s headquarters to protest against free-wheeling capitalism. They recently planted an apple tree nearby.
"I hope the roots will grow up so strong that they will cause it to explode," Boeckermann said.
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(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
08:51 PM IST