Ireland has complained to the European Commission that it is being undercut by rival centers competing to host financial firms looking for a European Union base outside London after Brexit.

Last week, U.S. insurer AIG became the biggest group so far to pick Luxembourg as its EU base, alarming Irish officials who fear others may follow after British Prime Minister Theresa May won the right to begin the potentially long process of separation from the EU.

While the final terms for doing business with the EU from Britain are uncertain, finance executives say privately they expect Brexit to isolate London and want to establish bases inside the bloc from where they can access its single market, prompting them to look at Frankfurt, Paris, Dublin and Luxembourg as alternatives.

AIG said its move was driven by Luxembourg’s proximity to its European clients and its role as a founder of the EU.

“Other cities in Europe are being very aggressive in trying to win business,” Eoghan Murphy, the minister in charge of promoting Dublin’s financial center, told Reuters, describing what he called “dangerous competition.”

“We have always said … we would not be predatory … that we are not interested in brass plating,” he said, referring to the practice of setting up a token operation with a “brass plate” sign outside in order to gain market access.

Although the EU wants to show a united front in divorce negotiations with Britain, the dispute over the division of Brexit spoils is already testing this.

Murphy said he had raised concerns with Valdis Dombrovskis, one of the European Commission’s most senior officials, about “creeping regulatory arbitrage,” a reference to undercutting rivals with lax rules.

Although banks face strict supervision under the European Central Bank in the euro zone, there is no similarly powerful regulator for insurers and other financial players, leaving decisions on factors such as the size of a local operation to individual countries.

The European Commission declined to comment on the Irish complaint but one official, who asked not to be named, said it “will monitor any developments in this area closely.”

Back Door Opened

With the final decision on moves out of London still months away, the rivalry has become increasingly hostile, with some Frankfurt lobbyists, for example, saying privately the Irish accent makes local English incomprehensible.

Nevertheless, Dublin has received 80 enquiries, according to IDA Ireland, the state agency that attracts foreign investment, from banks to fund managers, while Ireland’s central bank received five applications from insurers to set up.

And while Murphy did not name Luxembourg, Irish officials said this was the center that had triggered the concerns.

“We are hearing from various sources that companies are being offered certain incentives,” said Murphy.

“That they are offering a back door to the single market, without the requirement to have capital to back up their entities in the European Union.”

Ireland’s central bank, wary of the risks in finance after the country was almost bankrupted by a financial crash, is making higher demands, officials and consultants said.

“Luxembourg do not appear to be requiring companies to set up substantial offices in order to establish an insurer,” said one senior insurance executive, who is choosing between locations including Dublin and Luxembourg.

Insurers hoped that this would be enough to access the EU single market and did not “want to commit to substantial cost,” he added.

This was disputed by a spokesman for Luxembourg’s finance ministry who said: “Luxembourg is strongly committed to the highest standards in the supervision of the financial sector.”

The stakes are high for Ireland in particular, where the arrival of foreign banks will be an important economic boost.

The country, whose economic rebound from near collapse has been held up by states like Germany as proof tough reforms can work, is now considered the EU economy most at risk from Brexit.

“Dublin will expand,” Kieran Donoghue, head of International Financial Services at IDA Ireland, said, adding that he expects companies to make their choice by the end of June. “Some investments will be significant and potentially transformative.”

However, a “hard Brexit” – in which Britain loses access to the EU’s single market – would wipe more than 4 percent off total Irish exports, compared to 2.5 percent for Germany and just 0.6 percent for Luxembourg, an Irish governmenĂ„t commissioned report showed.

Such a hit for Ireland’s export-focussed economy could knock around 3.5 percent off GDP within a decade, and cost around 40,000 jobs, the report said.

Murphy’s department set a target two years ago of adding 10,000 new financial services jobs by 2020 – a 30 percent jump – meaning that even if Ireland succeeds in winning business, it will only help offset the expected broader economic damage.

“A number of companies have already committed to Dublin,” Donoghue said. “The shortlist for several is between Dublin and one other center.”

As decisions near, one consultant advising firms on the move said that the atmosphere had become “heated.”

“Ireland is No.1 or No.2 for most companies. But there is no point in being second.”

(Additional reporting by Carolyn Cohn in London; Writing By John O’Donnell.)