It certainly hasn’t taken long for European capitals to evaluate the effect of Brexit on EU politics, economics, and, indeed, the Union’s survival. While some leaders have argued for a smooth exit process and maintaining a strong relationship with Europe’s second-largest economy, others claim that the outcome of the June 2016 vote presents an opportunity for further integration between the remaining EU states, which the UK has long since been blocking. In the eyes of the latter bloc, further integration is even a necessity, since one country leaving could inspire similar pleas in member states where criticism of the EU is already high.

Such promise of an ever-closer union has, however, been slow to materialize. Thus far, there has only been a plan for additional defense research cooperation — hardly the stuff of integrationist dreams. Instead, the quickest reaction has come from those who are now jostling to attract businesses that benefitted from the UK’s special position in the EU and stand to lose out when Britain formally leaves Europe.

Paris was the first off the starting blocks, launching an ad campaign calling for companies to “move on” and “join Paris and its opportunities” only the day after the referendum. The city’s financial district of La Defense followed up with its own advertising blitz to attract Britain’s financial industry — London contains 85% of European-based hedge funds — through tongue-in-cheek references to its culinary riches (frogs) as opposed to London’s meteorological ones (fogs).

Representatives of Frankfurt — the German financial center — have also been pitching their city as the obvious place for financial service providers to relocate, since it already hosts the European Central Bank, the Bundesbank, and the headquarters of both Deutsche Bank and Commerzbank, the country’s two biggest lenders. The recently-scuppered London Stock Exchange-Deutsche Boerse merger may dent Frankfurt’s selling points. Still, Berlin is also trying to pry business away from a Brexiting Britain, but unlike Frankfurt, it is targeting UK-based tech startups. Berlin faces no small degree of stiff competition from Dublin, however. The Irish capital already plays host to numerous tech companies that benefit from its corporate tax rate — one of the lowest in the Eurozone — and its English-speaking populace. A debate on whether to host financial firms is simmering away in Ireland. The Celtic Tiger was left deeply indebted by bank bailouts in the midst of the financial crisis. Other cities, including Lisbon and Amsterdam, are also throwing their name in the hat.

UK businesses handily started preparing contingency plans should the worst happen well ahead of the vote, but they are being kept in limbo, waiting for more clarity before moving their activities from British shores.

The eventual success of EU cities’ charm offensives depends on the kind of deal the UK government will secure. A “hard Brexit” would see the UK out of the Single Market. This would put heavy tariffs on UK-EU trade, which would most likely prompt multinationals to move their headquarters to the Continent. It could also trigger the kind of exodus that the Parisian financial district is drooling over, since the presence of EU-denominated clearing houses and international investment bankers in the Square Mile depends on passporting rights — which allow banks with subsidiaries in the EU to sell services or set up branches in each of the bloc’s members with minimal regulatory hassle. A couple weeks ago, Whitehall made clear its preference for a hard Brexit, and recent High Court battles have not blunted Theresa May’s ambitions.

Several strategies are ultimately available for the British financial sector, from a simple internal relocation of sales operations that would bring clients to UK-based traders and compliance teams — a scenario the EU is unlikely to allow — to setting up branches in countries where they already have licenses. More costly models include forming new compliance and trading teams in the EU to book deals and then flipping those over to UK-based entities, or the full establishment of activities in an EU nation. Such options, however, may prove so costly that smaller businesses have to shutter their EU operations entirely.

According to estimates by the somewhat Eurosceptic think tank OpenEurope, capital flight would be limited, since only a fifth of the UK financial sector’s activities rely on passporting rights. Even given these less-than-clear projections, there will undoubtedly be economic and social consequences across the country. Financial lobby group TheCityUK estimates that the industry employs 1.1 million people and generates a trade surplus of about $90 billion in 2014. A recent PwC report also found that the sector paid roughly that same amount in taxes in the year to March 31 2016, or 11.5% of total national tax receipts. It’s safe to say that the financial services sector has become a pillar of the UK economy, and that removing it would cause the entire edifice to become that bit shakier.

Consequently, business executives are lobbying hard for the kind of “soft Brexit” that would enable them to implement low-cost strategies. At first sight, negotiations are not looking promising. In order for Britain to remain in the Single Market, the EU is demanding that it accept freedom of movement, which itself was the biggest reason British voters chose to leave the EU. The UK could theoretically buy its entry into the Single Market or join the European Economic Area, but doing so would give it no influence on policies that are set in Brussels, contradicting Brexiteers’ claim that EU membership costs Britain more than it gains.

Brussels’ Brexit negotiator, Michel Barnier, has been playing hardball since talks on December 6, pressuring London to reach a deal and leave by October 2018, while refusing to allow Britain to cherrypick its participation in the single market. At the other end of the spectrum, the British Chancellor of the Exchequer Phillip Hammond is trying to secure acceptable terms for the City while ruling out a special deal. The current level of uncertainty and the prospect of having to go it alone as early as fall 2018 gives UK businesses little breathing room. As a result, they may be inspired to jump ship rather than wait to be pushed.

But political statements before negotiations actually begin need to be assessed with a cold eye. On December 8, a Brussels-based journalist reported that EU officials were considering an “exit charge” of up to $65 billion, with failure to pay meaning Brexit would occur without an agreement on single market access and tariffs being made, leaving Britain-EU trade in the lurch. Barnier’s dramatic disregard of Article 50 of the Lisbon Treaty — which officially opens the 2-year exit process — are yet other examples of rhetorical challenges and political spectacle that matter little in final negotiations.

The future of UK-EU relations will be decided in backroom deals under the overwhelming influence of German Chancellor Angela Merkel. The longstanding European leader has seen her star rise yet further following the defeat of former prime minister Matteo Renzi in the Italian constitutional referendum, as well as French President François Hollande’s decision not to seek another term, leaving her the last woman standing out of a generation of centrist, Europhile heads of state.

Merkel, who is experienced in forging compromise after managing successive crises in her more than 11 years in office, has two considerations to keep in mind throughout Brexit negotiations. First, Germany must safeguard its free trade relationship with the UK — its third-largest export market, after the US and France. According to the German Federal Statistical Office, the German trade surplus with the UK has roughly quadrupled since 2000, reaching $55 billion last year.

On the other hand, Merkel cannot afford to show weakness in the face of rising Euroscepticism throughout the EU. The Netherlands, France, and most likely Italy, all EU founding members and key regional players, will host crucial general elections during the first half of 2017, and far-right politicians are feeding off of anti-EU sentiment, which is already running high in these countries. Compromising on any of the EU’s cornerstone four freedoms would strengthen populist claims that states can be better off outside the EU, threatening the viability of the entire European experiment.

With such considerations, it is improbable that opportunities for Frankfurt to host UK-based businesses will play a central role in shaping Merkel’s strategy. But this courting will doubtless run its course, and the potential exodus may be used as a bargaining chip to pressure Westminster into a compromise.