Business leaders should respect the UK’s decision to leave the EU, but can help to mitigate the economic damage by bringing reason to an otherwise purely political process, Steffen Kampeter told EURACTIV.com ahead of the launch of the Brexit Exchange forum.
Steffen Kampeter is director-general of the Confederation of German Employers Associations. He was a CDU MP for more than 25 years and served as Germany’s deputy finance minister from 2009 to 2015. Kampeter is one of co-chairs and advocates of the Brexit Exchange, the newly formed platform, “associated with neither the remain nor leave EU campaigns but squarely focused on getting the best outcome for Britain and Europe”.
Kampeter spoke to EURACTIV.com’s Editor-in-Chief Daniela Vincenti.
Tomorrow, you and other business leaders will launch the Brexit Exchange. What are you trying to achieve with this new tool?
The Brexit debate is a political debate and we are trying to enhance the economic rationality of the process, because the debate only driven by political arguments may lead to economic disadvantages. What we want to achieve is a more rational process that is underlined by business arguments.
Are you doing this out of fear that your business concerns will not be heard and because you are worried about the risk of falling into a blame game?
We have different frameworks to articulate business expectations, for example, BusinessEurope, which represents businesses in talks with the European Commission. But the future of trade and investment, which means the UK and the EU-27, is so complex that one framework is not sufficient to deliver the insights to both sides. A differentiated approach should be more viable than a single-issue one.
So will this be a forum? What kind of framework are you putting up?
The first step is to open the business debate on a bipartisan and multi-interest approach in London next week. It will be followed up by several smaller events, which will be much more focussed on special business sectors, to see what is going to happen. I think what we can deliver is much more insight and detail, and bring added value for the negotiators. We will not decide the process but we can fuel it with the necessary information, to make it a more rational one.
Are you trying to create a kind of Davos forum aimed at Brexit?
No, Davos is a good thing for the global dialogue. This is much more of a working format. There will be a limited approach because the timeline of Article 50 is not the global development of the next ten of 15 years. We only have 18 months.
So what are the sectors that will be covered and which ones do you think will be most impacted?
The participants are mainly from industry but we will probably include other services that contribute to them. As we don’t have a Brexit-type framework in Brussels, we probably have to see that many of the challenges regarding special sectors, for example, automotive or others, can only be contributed to by a more focused and special analysis.
On the political side, we are trying to make sense of the debate here and understand why a country that is significantly poorer than Germany, with fewer internationally competitive industries and a greater dependence on foreign capital, thinks it can afford to quit the single market. What is your take?
That is not really the question for me to answer.
As a business leader.
Probably only a minority of business leaders would have chosen Brexit. But it is our approach is to respect the decision of the UK and try, as some say, to make a success of Brexit, and others say, to limit the damage. We are not the ones to tell the politicians what they should decide. The referendum is data for us and we have to deal with it.
More specifically, foreign-owned businesses generate more than half of Germany’s exports, many of which are intermediate goods, links within the supply chain. These companies are very vulnerable to Britain leaving the single market. So what will be your input in making sure those companies become more resilient?
There is actually one area where the EU-27 politicians and businesses are all on the same side. The integrity of the single market based on the four freedoms is our core priority. But on the other hand, we have to organise the smooth transition towards a future trade agreement, to allow businesses to prepare and adjust to the new situation. And this is an area where we can deliver insights and give the negotiators information on the points that have to be integrated into this future trade and investment agreement between the UK and the EU to make the transition smooth. This mitigates the adverse effects of Brexit for companies and citizens and if we can deliver on this it maintains as close an economic relationship as possible between the EU and the UK. In politics rhetorical disarmament appears to be the key, but in business, we prefer to take a more rational approach.
Do business people believe that since maintaining the status quo is not possible, there may be an option to have a kind of economic integration comparable to the single market, with limited labour mobility?
I don’t see the political and economic will to separate the idea of the single market from the four fundamental freedoms: the free movement of people, goods, capital and services. If you see the guidelines for Michel Barnier, which were given by the heads of state a few days ago, you will not find a serious suggestion that the four freedoms in connection with the single market should be given up. There is no way to split them up, it will not be possible and will not be accepted by businesses across the EU-27.
Do you think it is possible to implement a temporary mobility solution until the full negotiations are completed?
The perception of business is that labour mobility, for the effectiveness of exchange, is crucial. We have seen the first negative impacts on UK businesses, as CBI reported, which are that for the first time, EU-27 citizens do not want to go and work in the UK under these conditions. So this will be discussed in the negotiations and maybe they will find a solution. But on the other hand, it has to be clear that the final agreement cannot give the UK all the benefits of the internal market but without the obligations.
Surely every company is starting to think of their best scenarios to deal with this situation. Some are already saying they will move jobs out of the UK. Do you see any feasible ideas for a final agreement yet? The Norwegian model has been mentioned in the past, but is this something you would consider a good solution?
What I see are serious negotiations, where both sides have laid out their maximum positions as a starting point. This is a political game, not a business game. But what we can do is if the negotiators see room for solutions, through the Brexit Exchange, at least for the economic aspects, we can deliver information on whether they are feasible and profitable for exchanges between UK businesses and EU-27 businesses.
I would describe us as a service to the negotiators. Our interest is to make trade happen, to help investment develop positively, but we have to accept whatever framework politicians give us. But we can deliver information regarding the fact that for different political surroundings there may be different economic impacts.
So you would say to focus on the constructive debate and leave politics aside?
We cannot leave politics aside but we try to rationalise the political debate.
We are waiting for the elections in the UK. What would be the best scenario for Mrs May? To have a strong mandate to negotiate something that would be a bit of a softer Brexit?
Nobody from abroad should give advice to the British electorate but there is a clear sentiment that with a clear mandate to Number 10 Downing Street and a full legislature period, at least the tone of the debate on the political level can contribute to finding a solution that fits both with the expectations of the EU and with the UK. There is much hope that Mrs May, with a clear mandate, will deliver a clear process, and probably the EU will react to that positively.