15 February 2018

European corporates confident of soft Brexit

European companies say they are prepared for Brexit and expect free movement of prople and goods to continue.

Despite continued political uncertainty about Brexit, the majority of businesses from the United Kingdom. France, Germany and Spain are prepared for the UK's departure and are confident of an upturn in turnover, employment and customers. According to a survey of over 2500 senior decision makers, confidence remains robust with businesses expecting the UK to retain tariff free access for goods, free movement of people and ECJ jurisdiction. Greater uncertainty remains over whether the UK will retain financial passporting rights. However, the next few months are critical, businesses say. They expect clarity by the summer to be able to make key commercial and investment decisions.

Soft Brexit

The research, carried out by FTI Consulting, pointed to the expectation of a 'soft Brexit' with eight out of ten respondents saying their company had established a dedicated Brexit team to manage the consequences and identify the opportunities. However, despite 68 per cent of companies saying they feel prepared for Brexit, only 40 per cent said they were dealing with supply chain issues and only 24 per cent were focused on engagement with policymakers. Of those who felt prepared, French firms displayed the most confidence with 90 per cent saying they understood the regulatory issues whilst German businesses were least confident of understanding the implications. 

Political reality

The research also revealed that 68 per cent of UK companies believed that Brexit would happen. This compares with France (72 per cent), Germany (66 per cent) and Spain (65 per cent). Hans Hack, a former diplomat and member of the FTI Consulting Brexit Taskforce, said of the research: 'The results hint at a misreading of the political reality. Certainty remains in short supply with little prospect of comapnies getting comfort on the future trade agreement any time soon.' He added that even with a deal, some sectors would be hit quite hard.