Brexit: where are we now

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It’s been three months now that our British friends voted, to everyone’s surprise, to take the United Kingdom out of the European Union. What has this changed?

  • Little, some would say: the pound sterling clearly underwent a devaluation – and another more recently – which has made British businesses more competitive on the international market (skyrocketing the manufacturing index), and the forecasted economic crash is still not visible.
  • Everything, others will say: despite that all-important Article 50 not having been triggered yet, the most recent polls of British businesses suggest considerably lowered projections as well as job cuts. A recession would already be underway. And the European Union is adamant with regards to negotiations: no common market without the freedom of movement of people.

So what’s actually going on? Reality doubtless lies between these two extremes: if the effects of a potential Brexit have not yet been felt, that might simply be because we’re still a long way from knowing its consequences. Are the City banks going to lose their ‘European Passport’ (meaning the right to conduct transactions within the Eurozone from London)? Is the United Kingdom headed towards more trade protectionism, as seems to be the case for so many other countries worldwide? And will negotiations truly be achieved in just two years as the Rome Treaty stipulates?

Three months on, we’re thus no better informed of the possible consequences of a Brexit. What’s more, the very question of putting the British vote into application remains open. Though Theresa May continues to state that ‘Brexit is Brexit’, and that she’ll trigger article 50 by March 2017, other voices point out its legal uncertainty, which could call for a parliamentary vote – today largely opposed to Brexit – or even a second referendum.

It’s within this climate of uncertainty that the voice of economic reason must make itself strongly heard by highlighting the importance of economic relations between the United Kingdom and Europe, and especially with France. And it is in everyone’s best interest to ensure continuity and avoid any hard breaks (‘no cliff edge’), as was pointed out by Lord Price, newly appointed Minister for Trade and Investment, during a recent visit to Paris.

We knew that a vote for the United Kingdom to leave the European Union would be a leap into the unknown. Whether we’re bullish or pessimistic on this future, it is in our duty to prepare for it as best we can, to defend our historic relations, and to commit ourselves to preserving our cordial rapport.

Please join our debate on LinkedIn here

Olivier Campenon, President of the Franco-British Chamber of Commerce and Industry
Translation support provided by Andreea Lavric @amnivez

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Olivier Campenon is the new President of the Franco British Chamber of Commerce & Industry starting in 2016.

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