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Half of EU27 business leaders cut UK investment as they fail to be heard on Brexit

25th Jun 18 7:51 am

Study finds

A survey of 800 EU27 business leaders from six major European markets published today by leading global law firm Baker McKenzie finds nearly half of respondents (46 per cent) say their company has reduced investment in the UK since the Brexit vote. Moreover, more than half (53 per cent) of the EU27 business community think their views are not well represented in the EU’s Brexit negotiations. 53 per cent of respondents say they have not been substantively consulted by the EU or their national government with regards to Brexit. Individuals in Ireland were particularly negative; fewer than one third of those surveyed said their industry had been consulted.

Accordingly, 78 per cent of EU27 businesses have already made changes to their operations or strategy – putting paid to the notion that companies in these markets are treading water whilst they await the outcome of the Brexit negotiations.

Commenting Baker McKenzie Trade partner Ross Denton said: “The clock continues ticking on a Brexit deal and, without any clarity as to its final shape, businesses in both the EU and UK are inevitably having to take matters into their own hands and make difficult strategic decisions. These decisions could end up hurting the UK economy in the long run if, as our survey suggests, EU27 businesses continue to re-think or pull the plug on their UK investments. It’s crucial now, more than ever before, that these businesses are given a voice on Brexit and are heard in Brussels and by their local governments.”

Finding a voice

The survey also reveals that, despite the trade imbalance which exists between the EU and the UK  and the subsequent hard-line approach taken by the EU in its Brexit negotiations, EU27 businesses still value the UK market. 95 per cent of those surveyed confirmed that the UK is of some importance to their businesses, with 67 per cent describing the UK market as ‘important’ or ‘extremely important.’

In addition, three quarters of respondents believe that the EU should make concessions to the UK to secure a better trading relationship for EU27 businesses, with support for concessions in Spain and the Netherlands significantly higher still at 87 per cent and 84 per cent respectively.

Indeed, many EU27 businesses expressed very little appetite for the UK to leave the union at all: 79 per cent of EU27 respondents said that their business would be the same or better off if the UK were to remain as part of the European Union. In Ireland, that percentage jumps as high as 97 per cent.

The survey confirmed that a Free Trade Agreement with the UK is more popular within the EU27 business community than a Customs Union, with 67 per cent of respondents deeming a FTA as being important to their business, versus 45% for the Customs Union.

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