EU’s No-Deal Preparation Is Not Adequate, Say Business Lobby Group

According to reports, warning that the European Commission’s own no-deal Brexit plans “fall short of what is needed to limit major disruptions” were delivered to it in a letter by business lobby groups.

Business Europe – an umbrella body for lobby groups across the EU, including Britain’s CBI, has sent the letter according to such reports. Warnings of disruption to flights, shortages of drug supply and break in data-sharing were highlighted in the letter.

It was in frequent contact with stakeholders, said the Commission.

However, it is not only the British companies that are very nervous about the economic repercussions of a no-deal Brexit, but the sentiments are also shared by European companies, the document suggests.

The EU was “ready to face” a no-deal scenario, the EU’s chief Brexit negotiator Michel Barnier had previously said. “The risk of a no deal has never been higher… we are ready,” Barnier had said on 13 March.

However, Nicole Sykes, the CBI’s head of EU negotiations told the media: “No one is ready – not the UK, not the EU.”

Urgency was “paramount” and that there “are ways to make sure that the costs for citizens on the UK and EU side are lower”, she said.

On December 19, a no-deal “Contingency Action Plan” was published by the European Commission. Hat plan included setting up of regulatory roll-overs, temporary in nature, to enable functioning of air services between the UK and the EU, as well as “equivalence” for financial derivatives and other financial services.

However, that plan has been clearly indicated to be insufficient in the letter from the Brussels-based business group.

“The Commission’s actions on aviation “may not be enough to prevent disruptions in the European aviation sector”, the letter reads.

“Responsibility for all UK drug import authorisations will have to pass to EU member states in a no-deal scenario and warns and “there will likely be a limited number of products at risk of supply shortages”, it further said.

With respect to the certification of imported medical devices, there are risks of a “disjointed approach”, it said, which would “inevitably create disparities in patient care across the EU”

Companies and institutions also might not have the “capacity” of restructuring contracts related to corporate data exchange which is critical for enabling of trading of services across borders. The letter said that in term of free flow of money, there is a concern among businesses about the varying viewpoints that have been taken by EU Member States.

In the event of a no-deal Brexit, it would be the UK economy that would be hit much harder compared to the wider European economy in the short and the long term, believe many economists, the lobby group opined in the letter. However there can be very severe and disproportionate hit for those European industries that are acutely dependent on imports from and exports to the UK.

“We can confirm receipt of this letter and we will reply in due course. We are frequently in contact with stakeholders, including Business Europe,” said a spokesman for the Commission about the letter.

(Adapted from BBC.com)

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Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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