FTSE 100 businesses give EU reform and renegotiation a big boost

Whenever EU reform and renegotiation are being debated, one of the most powerful claims made by the status-quo side is that it would generate uncertainty which would be bad for business.

Well today's FT reports that according to a survey of one in three FTSE100 chairmen conducted by Korn Ferry, a leadership and talent consultancy, the overwhelming majority - 81% - said the want to see the UK renegotiate its relationship with the EU. In comparison, only 15% back staying in no matter what and 4% supporting an outright exit. There was naturally a range of views in terms of how far-reaching the renegotiation ought to be; some business leaders backed only "limited" changes, but a clear majority - 63% - backed "a return of social and economic power to nation states".

Although the business support for EU reform is not surprising - as our own pan-European business campaign for EU reform showed - the extent of support is considerable. This is particularly true since it comes from large corporations, which are often seen as gaining greater benefit from the current EU set up than small and medium sized enterprises, which bear a disproportionately larger burden from EU regulations. 

With such a strong mandate from business, it really is time for Cameron to ramp up his push for reform and flesh out exactly what kind of reform is desired, and how it can be achieved.

Open Europe Chairman Lord Leach: The single market must be the EU's primary mission

Open Europe Chairman Lord Leach of Fairford writes in the Sunday Times: 

In the 1990s, the process of eliminating trade barriers between Europe’s member states was hijacked by an ideologically driven elite bent on nation-building; on giving flesh to the postwar dream of ending conflict by abolishing Europe’s patchwork quilt of selfish national states.

In constructing this project, the ends always justified the means, even if this meant ignoring the electorate. Those in this country who opposed the UK joining what was to be the crowning glory of European integration, the single currency, were vilified as Little Englanders.

Now the game is up. Elected parliaments have become the sole accepted seal of legitimacy. A new generation is saying that the EU is in desperate need of both democratic and economic reform. The Dutch government has called time on “ever closer union”, the German chancellor Angela Merkel says we should “consider whether we can give something back” to member states, and the Italian prime minister Enrico Letta talks of treaty changes in the “very near future”.

The latest sign of the changing times is an unprecedented joint call from German, Swedish and UK business leaders — from the head of the world’s largest bank down to the Mittelstand, between them guiding companies employing about 1m people — in favour of sweeping change. Germany’s leading business magazine, Wirtschaftswoche, wrote: “Now business leaders have spoken up — some of them for the first time. This is not only good, but it is long overdue.”

Britain needs to be attuned to the changing mood. Its current shouting match between polarised camps doesn’t help. I have lost count of the number of times I’ve been asked by the BBC to take part in or stage a debate between “europhile” and “eurosceptic” business leaders. Spurious facts and figures are thrown around — “3m jobs will be lost if we leave the EU” or, “if we withdrew, the UK would instantly be freed from all EU regulatory costs”.

The reality is that business tends to be neither die-hard europhiles nor convinced “outers” — with exceptions, most are in between. Business values access to European markets but doesn’t see why it has to come with a political union. On balance, business still likes the EU’s combined weight in trade talks but worries about protectionist tendencies and the dampening effect of Brussels regulation on firms competing in global markets. As the economic climate hardens, more business people on the Continent make the same analysis, concluding that we have to lay grand ideological projects to rest and focus on where the EU can add value.

The objective is therefore simple. The EU’s defining purpose must be the single market — it doesn’t have to be the only thing the EU does, but it is the primary mission. The task at hand is equally simple: maximise trade — including in the hugely underdeveloped EU services market — and minimise non-trade costs. Once we have tested the limits of reform, we can see if it still makes sense to remain an EU member.

So it’s time for business to make its voice heard. It won’t be easy to achieve the reforms we need if we are to reverse Europe’s economic decline and win back the support of our electorates. If Europe’s wealth and job creators throw their weight behind this agenda, not even the most detached politician or eurocrat will be able to resist.