Tuesday 20 August 2019

Bosses of Europe's leading firms demand greater clarity on Brexit

Tony Smurfit, CEO of global packaging group Smurfit Kappa
Tony Smurfit, CEO of global packaging group Smurfit Kappa
John Mulligan

John Mulligan

There is "widespread concern" about Brexit amongst Europe's top companies as chairman and chief executives fret about the challenges posed by the UK's exit from the EU - according to a survey of 57 leading chairmen and chief executives.

While the first ever survey of business leaders by the European Round Table of Industrialists (ERT) found that they are generally positive about the global business outlook, Brexit is weighing on sentiment, with the deadline for the UK leaving the trading bloc now just over a year away.

"Almost all of our members are expecting that Brexit will have an impact on their companies," said ERT chairman Benoit Potier, who is also the chairman and chief executive of French global gases supplier, Air Liquide.

He added that the ERT members believe the EU project, including the Single Market, "is of utmost importance".

"A hard Brexit would be most damaging for investment and jobs," said Mr Potier.

"The survey results demonstrate that ERT members are confident in the European and global economy.

"However, this positive business outlook comes at a time of unprecedented challenges for Europe relating to Brexit and increasing market barriers globally," he added.

The ERT's members include Paul Bulcke, the chairman of Nestle; Iain Conn, the chief executive of Bord Gáis Energy owner Centrica; Kurt Bock, the chief executive of BASF; and Pablo Isla, the chairman and CEO of Zara owner Inditex.

The only Irish member of the group is Tony Smurfit, pictured, the CEO of global packaging group Smurfit Kappa.

The ERT members have called for greater clarity about the way forward for Brexit in the short term, and they have expressed concern regarding future business investments.

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They have called for a focus on maximising continuity of policy and regulations in a transition period.

"The long-term relationship between the UK and EU is of great importance given the scale of the UK economy and its capabilities in security, defence, intelligence and diplomacy," the ERT said yesterday.

It added: "While discussions progress on the UK's long-term relationship with the EU, an effective transition period is necessary to provide certainty over the next two to three years.

"Businesses will soon be actively planning for 2019 and both EU and UK businesses need a predictable pathway within the next three months if investment decisions are not to be materially impacted."

The ERT has also called for competitiveness to be preserved. "Maintaining industry competitiveness should remain a top priority for politicians and policymakers," said Mr Bock.

"The global corporate landscape is changing rapidly and European companies risk losing out to their American and Chinese market competitors. This requires the maximum possible access to global markets and an innovation friendly regulatory environment in Europe."

The survey found that 67pc of executives at the firms queried are only "somewhat positive" about the prospects for their companies. Only 12pc were "very positive", while 16pc were moderately positive.

Within the next 12 months, 57pc expect a moderate increase in their sales within Europe, while 61pc expect a moderate increase outside the region. But 22pc expect sales within Europe to remain static.

Some 41pc of executives surveyed expect their capital investment levels within Europe to remain unchanged over the next 12 months, while 39pc expect a moderate increase.

Irish Independent

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