Critical agencies that oversee Europe’s banks and pharmaceutical sector will move from London to cities on the Continent, political leaders in Brussels decided Monday, potentially ominous harbingers of how Britain’s impending exit from the European Union could diminish the country’s economic clout.
The European Medicines Agency will move to Amsterdam, while European Union member states are expected to vote on the relocation of the European Banking Authority later on Monday. The countries voted by secret ballot on the new home of the medicines agency, and the Dutch city ended up in a tie with Milan, with the winner eventually chosen by drawing lots, a spokeswoman for the European Union said.
The departure of the European Medicines Agency, Europe’s equivalent of the Food and Drug Administration in the United States, is a blow to the prestige of Britain’s pharmaceutical industry, an important pillar of the economy and an example of the country’s bona fides in scientific research and development.
The European Banking Authority, meanwhile, has strong symbolic value among cities jostling to become continental Europe’s financial capital. Its departure serves as a warning of the consequences of Brexit for London, currently the banking capital of Europe, and illustrates the fierce competition from other capitals for the spoils.
“There is no upside for the city of London” from Brexit, said Nicolas Véron, a senior fellow at Bruegel, a research organization in Brussels. “It will lose business, not gain.”
From Britain’s point of view, the European Medicines Agency is the larger of the two losses in tangible terms, as it has around 890 staff. It oversees the approval of drugs for use across Europe, has an annual budget of more than $300 million, and generates significant additional revenue for London. For example, on most weekdays its visiting experts fill 350 hotel rooms in the city.
Its departure also underscores continuing questions about how British pharmaceutical companies will be regulated after the country’s withdrawal from the bloc, known as Brexit, a shift scheduled for March 2019.
The sector is an important one, and enjoys substantially more public support among Britons than finance, the image of which has been tarnished in recent years.
Charles Tannock, a Conservative Party lawmaker in the European Parliament, described the relocation of the medicines agency on Twitter as a “huge loss to UK pharma,” adding that he was “heart broken” to lose the organization.
“The relocation of the E.M.A. away from London will be a bitter pill to swallow,” added Rory Palmer, the health policy spokesman for the opposition Labour Party’s lawmakers in the European Parliament. “Our economy will suffer. Our health sector will suffer. Our successful pharmaceutical industry will suffer.”
“But most of all, patients will suffer, from delays and the potential loss of access to medicines and research, if we are to crash out of the E.U.,” Mr. Palmer said in a statement, referring to the possibility that Britain might quit the bloc without an agreement to stay within European regulatory structures.
Before the discussion on relocation, Donald Tusk, the president of the European Council, wished all the candidates to host the agencies luck but added on Twitter: “Whatever the outcome, the real winner of today’s vote is EU27. Organized and getting ready for #Brexit.”