City Desk

London may have won the battle to stage the 2012 Olympics, but the French are now determined to see London relegated in the financial world with an ambitious programme spear-headed by French president Nicolas Sarkozy involving the investment of 50 billion euros to "transform Paris and its suburban regions into a vibrant modern economic hub" reports the FT.

The programme "le Grand Paris" involves linking Paris with the suburbs and creating transport links which is hoped will provide an economic stimulus to the Parisian economy.  Plans are also underway to expand the business district around La Defense with more banks and financial organisations encouraged to relocate to this swanky part of the French capital.

The most serious threat to London is the powerful "Europlace" organisation described by the FT as "grouping all the great and good in French finance and industry” which is actively touting for business that has left London in the financial services industry.

The downward trend in fortunes for London and Wall Street is an opportunity that will not be missed by Paris and Frankfurt with so many highly skilled financiers being made redundant.  Paris is according to Paul Betts of the FT "has certainly a stronger case today than in the pre-crisis period".  The Parisian economy has been more robust than London in the current economic crisis.

The excellent transport links from Paris to, London, Brussels, Geneva, Amsterdam and Frankfurt push Paris ahead of London in terms of infrastructure with daily concerns that the cross rail project is under serious threat due to the recession.

The difference between London and Paris has been the willingness of successive French presidents to create "legacy projects" that will remain in the memories of generations to come.  The French are determined to get even with London and now is the best time to do so with so many negatives against London.

 Business groups have privately expressed concerns that Britain may lose out because of prime minister Gordon Brown waning influence in the world, and with a more assertive French role in world politics the threat to the City of London is much more serious than first thought.

photo credit: London Daily News