European holidays under threat

Telephones go unanswered, cities are deserted and women and children lead an exodus to the beaches. It might sound like the latest Hollywood disaster movie but it is a traditional August scene in many European financial centres as bankers join the annual holiday stampede.

Spain, Italy and France are at the centre of the great disappearing act. For bankers in Madrid, Milan and Paris, the standard two weeks taken by their counterparts in the City of London have always been thought inadequate. Three or even four weeks are the norm.

An Italian former capital markets banker in Milan, now a headhunter, said August can be written off when it comes to doing business in Italy: "August is a dead month. You might find a few people around in the first and last weeks, but in the middle two weeks you will be lucky to find anyone at all."

Claudio Aguirre, a partner at Altamar Private Equity and former Merrill Lynch investment banker in Spain, said most Spanish executives and government officials take three or four weeks off each August: "There is a gentleman's agreement that August is the best month in which to go away.

There are no deals being done and, as a banker, you know you won't be missing anything."

Spanish bankers' long holidays are partly dictated by the school holidays. While pupils in the UK have six weeks off from the end of July, children in Spain begin a 12-week holiday a month earlier.

Aguirre said as a result bankers in Madrid typically send their wives and children to holiday homes in July before joining them in August. Until then, male bankers stay in the cities pursuing bachelor lifestyles, a phenomenon known as "doing a Rodriguez".

A senior employee at a US bank in Madrid said more than half the city's investment bankers are doing a Rodriguez at this time of year: "We are one of the few professions that can afford it."

In France, working-time regulations, including the 35-hour week, entitle non-managerial staff who work more than 1,600 hours a year to extra time off, in addition to the 25 days statutory minimum.

Philippe Thomas, an employment expert at law firm Lovells in Paris, said as a result some junior bankers and administrative staff take seven weeks holiday a year.

However, many European bankers believe long summer holidays are going the same way as siestas and three-course lunches and crumpling in the face of the Anglo-Saxon work ethic.

Marc Vincent, head of Mediobanca in Paris, said few bankers take August off and that much of the five weeks' annual holiday granted by the state is not taken: "For the past two years, August has been busy in Paris. People have become used to taking their holidays in chunks of one week or 10 days throughout the year."

Giovanni Tamburi, chairman of Tamburi & Associati, a leading corporate finance boutique in Italy, said he expects to work during much of August: "A client called me yesterday and asked if I could be reachable for a meeting during the whole of August. I said yes."

One measure of the new French disregard for holidays is that since 2001 Euronext, the pan-European stock exchange, has been open in France on national holidays such as July 14, when previously it was closed.

In much of Europe, working through the summer has long been the norm. In Germany, six-week school holidays are staggered throughout July and August, thereby ensuring German businesses remain in continuous operation.

Florian Hach, a former derivatives structurer at Deutsche Bank in Frankfurt and founder of ehedge, a German hedge funds portal, said many people in Frankfurt have already taken a break: "We are nothing like Madrid or Rome. You cannot write off the whole of August."

London bankers have to make do with shorter statutory holidays of 20 days, compared with 25 days across much of the rest of Europe. They say they must also endure frequent interruptions from the office while away via BlackBerry or mobile phone.

Peter Talibart, an employment specialist at Norton Rose, a London law firm, said the intrusion of work into holiday time has become so extreme that bankers could be entitled to additional time off: "If you're in Portugal and you spend three hours a day on the telephone to the office, you may have a case for additional holiday pay."

Whether bankers would ever demand extra time off is another question. Failure to take up existing holiday leave is so widespread that Merrill Lynch sends out an annual memo reminding its staff that they must take off a minimum of five consecutive days a year.

As well as encouraging staff to take proper rest, the edict has another intent. People involved in illicit goings-on often avoid taking holidays for fear of being found out. If this is the case, southern Europe's long holidaying bankers must be squeaky clean.