Brexit – Europe's business leaders call for clarity on the transition period

13 December 2017

By Benoît Potier, ERT Chairman and Chairman and CEO of Air Liquide

This week’s European Council discussions on Brexit are critically important.

Following the recent breakthrough, the EU 27 will now need to confirm whether sufficient progress has been achieved on questions relating to the UK’s withdrawal – financial commitments, citizens’ rights and the Irish border – to allow discussions to begin on the long-term relationship between the United Kingdom and the EU.

The European Round Table of Industrialists (ERT), which represents more than 50 of the leading businesses in Europe including the UK recognises the complexity of the negotiations. However, there are some clear and urgent principles that we call on Europe’s leaders to consider.

European industry continues to play a pivotal role in the EU economy as a major generator of employment and growth. Together, ERT Member companies sustain around 6.8 million jobs in Europe and invest more than €50 billion annually in R&D, largely in Europe.

The voice of European business needs to be heard not just for its own sake – but for the sake of our customers and employees throughout the value chain.

The first vital principle is urgency in agreeing the terms of a transition period. In order to reduce near-term uncertainty and allow time to negotiate the longer-term trade relationship, an arrangement that is very near to the status quo in terms of trading relations is required once the UK formally exits the European Union in March 2019.

Businesses need certainty, not in a year’s time but now, in order to make investments and trade decisions that will take effect from 2019 onwards. The entire European economy including the UK, would benefit from this clarity. The alternative is indecision, lack of investment and lack of job creation.

What should this transition look like? The second principle we encourage is maximum trading and regulatory alignment during the transition period. A transition that involves disruption in rules risks damaging close linkages in trade, investment and the movement of labour and data which underpin Europe’s economic growth.

In the interests of Europe’s broader economic growth, a transition period of at least two years is essential to ensure much needed certainty and to trigger investment and economic activity, while discussions over the nature of the long-term relationship progress.

Thirdly, once the EU 27 have agreed that sufficient progress has been achieved, talks towards a long-term future trade relationship should accelerate in order to minimise continued unpredictability. ERT Members believe that this is essential in the longer-term interests of protecting Europe’s economy.

Clearly the best outcome is one that enables growth across Europe, including the UK, and that respects both the integrity of the European Union’s internal market, and the rules that underpin it.

To help us get there, we urgently need certainty over the pathway.

Benoît Potier

Benoît Potier

Chairman, ERT

Chairman and CEO, Air Liquide