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25/07/2016

Airbus, Citi join corporate chorus warning against Britain leaving EU

UK & Europe

Airbus, Citi join corporate chorus warning against Britain leaving EU

London dominates the $5-trillion-a-day foreign exchange market, trading twice as many dollars as the United States and more than twice as many euros as the entire euro zone, according to TheCityUK study.

European aerospace group Airbus, one of Britain's largest employers, has voiced concerns over the possibility of the country leaving the European Union, saying the benefits of an alternative economic model needed to be proven.

The Franco-German company, that employs 17,000 workers in Britain, is the latest large foreign investor to say it favours Britain continuing its membership of the 28-member trading bloc.

Car giants Ford and Japan's Nissan have said they would have to re-evaluate their operations if Britain pulled out of the EU in a proposed referendum.

Airbus, formerly known as EADS, employs most of its staff in Bristol and north Wales where the company's passenger plane wings are made and assembled.

"Airbus Group, we note, would never have achieved its success to date without a working and effective partnership of countries and companies within Europe, which only collectively can deliver the scale required to be globally successful," UK Chief Executive Robin Southwell will tell attendees at a company event late on Tuesday.

"Any other economic model which seeks or offers to change the dynamic and advantageous characteristics which we presently enjoy – and believe are optimal to our delivering sustained growth and employment – would need to specifically address this quite proper challenge in a detailed and compelling manner."

Prime Minister David Cameron promised voters he would renegotiate the terms of Britain's EU membership before holding an in-out referendum by 2017 if his ruling Conservatives were returned to power after elections due in May 2015.

The centre-right party is trailing in the polls and faces a rising threat from the small, anti-EU UK Independence Party (UKIP).

Last month Business Secretary Vince Cable told an economic conference the chances of Britain leaving the EU were "very remote" with a five percent chance of happening.

Citigroup joins warning

The corporate sector warnings for Britain to stay in the EU have become bigger and louder.

On Tuesday (21 January) by Jim Cowles, chief executive officer for Europe, Middle East and Africa at Citigroup, told the Financial Times newspaper that there was "mounting concern" among clients about their ability to use the United Kingdom as a regional hub if the country exits the EU.

"It is not that international companies will stop investing in Britain, but their investment just will not be at the scale we have become accustomed to," Cowles told the newspaper.

He added that the existing trade arrangements will be at risk and Britain will have no influence in making the rules in the future.

According to the Financial Times, the British Bankers' Association has also sent a submission to a Treasury review of powers between the United Kingdom and Germany. The submission said that a single market for financial services is a significant factor in the success of the United Kingdom as a financial centre, and of considerable value to the UK economy.

The London-based Centre for European Reform (CER) predicted last week that Britain would struggle to maintain trade with other EU member states – now 54 percent of goods trade – if it left the bloc.

Background

A potential British exit from the European Union has come at the top of the political agenda after Prime Minister David Cameron said that Britain must use the upheaval created by the eurozone crisis to forge a new relationship with the European Union.

In January 2013, he promised Britons a clear in/out referendum on the UK’s European Union membership if he was re-elected in 2015, based on a renegotiated EU treaty.

With the onset of the eurozone crisis and the need for further economic and political integration, Cameron's Conservatives have increasingly sought to loosen Britainss ties and asked to renegotiate the Union's treaties. Some favour an outright British exit from the EU with a turn towards strengthening economic ties with Commonwealth countries and the United States.

Britain has negotiated a number of opt-outs from key EU policy areas since its accession in 1973. The country is not part of the eurozone and has not signed the free-border Schengen Treaty and does not want to abide by a number of EU police and judicial cooperation rules.

Timeline

  • 2015: British elections
  • 2017: Possible referendum in the UK on EU membership