Brexit is a ‘future of Europe’ issue, European industry warns

Participants at the event organised by EURACTIV in London, where they discussed whether European business can influence the outcome of Brexit. [Ian Hall/EURACTIV]

The EU27 must “save Britain from itself” by offering a “looser deal” that protects the European Union or else the future of Europe is at stake, an Irish industry leader told a EURACTIV forum in Westminster.

Danny McCoy, chief executive of the Irish Business and Employers’ Confederation (Ibec), said that “while the EU27 are in a very strong macroeconomic position right now, they will not be immune from the outcome of the Brexit discussion”.

Therefore, Brexit should not be looked at “firmly as an issue for Britain right now” but as a “future of Europe issue,” he told the event, which discussed whether European business can influence the Brexit outcome.

The panel was made up of representatives from the Confederation of British Industry (CBI), the Council of British Chambers of Commerce in Europe (COBCOE), BritishAmerican Business, German industry association VDMA and Ibec.

The EURACTIV event coincided the EU Summit dinner in Brussels where Prime Minister Theresa May urged the EU to start trade negotiations and to begin plans for the post-Brexit transition period.

May pleads for Brexit deal she can sell at home

British Prime Minister Theresa May pressed EU leaders on the first day of the EU summit yesterday (19 October) for a Brexit deal she can “defend” at home as her counterparts said at a summit in Brussels that there were encouraging signs of progress in the talks.

EURACTIV’s audience heard Andrew Hawkins, executive chairman of ComRes, highlight the growing importance of microbusiness and “minimising non-tariff barriers on EU trade” within the Brexit debate.

Hawkins said the “caricature of Brexit negotiations as bilateral” was a misrepresentation; polling showed that the views of member states towards Brexit and the EU vary drastically.

COBCOE has recently published research on business and Brexit. The group’s CEO, Anne-Marie Martin, said that – according to the research – a key concern among European business is the future of “the UK’s positioning as a springboard for EU companies into the global market”.

While the Brexit negotiations continue to stall, the panel discussed how this creates opportunities for business to engage with governments and potentially influence the Brexit outcome.

“We have to make a success of Brexit,” said James Ashton-Bell, the CBI’s head of trade and investment. He said businesses are “exhausted, overwhelmed, and there are varying levels of preparedness”.

The CBI’s main challenge, he said, is “raising the awareness [of Brexit] among all types of businesses, we find that some of the people that get hit hardest are those microbusinesses, who, actually in many cases were quite pro-Brexit. There is no ‘one-size-fits-all’ model but we have to deliver a type of Brexit that is appropriate for their needs.”

“The reality is, governments don’t do trade – they make the rules of trade. Businesses trade,” he said, adding that there are “too few [people] solving too complex issues, but we are slowly getting to a point where [the UK] government is creating partnerships to solve problems.”

Ashton-Bell agreed that the UK needs to align itself with non-European powers “but not at the expense or detriment of our closest neighbours, who are our biggest clients. They need us a lot less than we need them.”

Emanuel Adam, director of policy and trade for BritishAmerican Business, which represents more than 700 American businesses operating in the UK, said: “It is no secret that the US is the most important investor to this country. The American business community has been one of the more vocal ones in the [Brexit] debate.”

“The US can act as the pain, but also the solution to some of those problems,” he said referring to the issues raised by the CBI and Ibec.

“Businesses, in the end, will be quite practical: they will either make [Brexit] work somehow or in the end, as is already happening, start to move colleagues over to Europe.”

Germany not coming to UK’s rescue

Holger Kunze, Director of VDMA’s European office, said that “within the Brexit debate there is a lot of misconception and misunderstanding in Germany.

“Sometimes people need to be confronted with the debate here, and I think Britain needs to be confronted with the debate in Germany on Brexit, because it is a totally different environment.”

Kunze added that German business will not  lobby for a Brexit deal that would be so flexible that the “UK ends up with a more advantageous position than any EU member state, because this will put the whole EU into question and the internal market is still the biggest export market for our clients.”

“Interestingly, Brexit and also [US President, Donald] Trump have really led to the reunification of the EU,” Kunze said, having noticed “a feeling in Germany, among companies, they believe that it is now worthwhile to stand up and invest in the EU because if we lose the EU we will have a tremendously big problem.”

A shared view amongst panellists was that any ‘bad deal’ on Brexit is better than no deal.

“‘No deal’ is an existential threat.” warned Ashton-Bell, who insisted that the status quo would not remain in Britain under a ‘no deal’ scenario, as it would result in an “actual shutdown of trade.”

Prime Minister May called for a two-year post-Brexit transition period in her Florence speech. However, most panellists cautioned that businesses needed more time to prepare and at least 18 months to integrate a new business plan.

COBCOE’S Martin said: “When a club has to go against one major economy, it shows cracks within the system”. It is therefore important now for member states to “look introspectively and take the opportunity to do something.”

More flexibility needed on timeframe

On transition periods, she criticised the limited timeframe, stating that “if you’re going to take this seriously, it needs to be open-ended, it needs to take as long as it takes.”

Ibec’s McCoy said he would rather Brexit did not happen, saying his priority was “not to change or shape [Brexit], it’s to stop. The important point here is, if the EU doesn’t change, it is inevitable that Brexit will happen.

“The EU27 have an onus to allow Britain to come in on a much looser agreement.”

The panel stressed that businesses across Europe should remain active in their demands and relations with governments throughout the negotiations.

COBCOE’s Martin said “we just want to crack on with trade talks” and warned that businesses “do not have time” for prolonged uncertainty.

EURACTIV’s 19 October forum was the latest in a series of Brexit-focused activity and followed similar events in Brussels in June and an event, also in Brussels, in April entitled ‘What does Brexit mean for your organisation? Communicate the realities’.