Two thirds of Belgian business people are worried about Brexit
Deloitte survey shows 67% of Belgian business people think that the impact of Brexit on their business will be negative.
Diegem, Belgium – 9 September, 2016 Belgian business leaders are asking themselves how the Brexit vote will affect them - and they are worried. This is the main conclusion from a Deloitte survey held after a webinar about Brexit, attended by some 1000 people, and featuring former President of the European Council Herman Van Rompuy. “Not the negative sentiments per se, but the high percentage of people worried about Brexit, surprises us”, says Piet Vandendriessche, CEO at Deloitte. “They are right to stay vigilant. With the right guidance, Belgian companies can learn how to make the most of Brexit and identify business opportunities.”
It is clear that the Brexit process is now in a waiting phase – where the UK and the European Union are establishing their negotiating positions. This makes it very difficult to assess the likely circumstances that businesses will face once Brexit becomes a reality. Nevertheless, business interest is high given the gravity of the issues at stake.
Once there is more clarity about what Brexit will look like, the situation will change dramatically – and companies will have to move fast to adapt to the new environment. This will affect the European economy and companies’ investment decisions, trading conditions, the legal validity of contracts, the physical location of businesses, people and workforce issues, and much more.
Sombre sentiments in the UK, but also in Belgium
Because of the high proportion of Belgian exports that go to the UK, Belgium is one of the EU Member States that is most exposed to Brexit. That fact that some 1000 participants attended the Deloitte webinar shows that Belgian companies are monitoring Brexit consequences closely.
67.2% of the respondents replied “negative impact” to the question “What impact do you believe Brexit will have on your business?”.
This echoes the worrying sentiments seen in the UK: according to a recent Deloitte CFO Survey, corporate confidence in the UK is taking a hit. Uncertainty has soared while optimism, risk appetite and revenue expectations have sharply dropped. British CFOs are shifting to defensive strategies, predicting slowdowns in hiring and capital spending.
Business leaders are calling for clarity on the European negotiations. “It’s impossible to forecast what kind of a trade deal the United Kingdom wants”, clarifies former President of the European Council Herman Van Rompuy. “The UK doesn’t want to be part of the single market like Norway. Nor does the UK want a customs union for goods such as the one the European Union has with Turkey. The UK wants access to the single market ‘à la carte’. They can negotiate sectoral agreements like the EU has with Switzerland. But that took 20 years of negotiations.”
A proactive approach to Brexit
Deloitte advises companies to take a closer look at how to manage the potential changes in multiple key business domains. “Brexit could have positive effects, such as new opportunities in mergers and acquisitions, re-valuations and re-pricing”, says Piet Vandendriessche, CEO at Deloitte. “Naturally, there will also be challenges. What to do about talent and mobility? How do you guide your people through this time of uncertainty?”
With regard to enterprise location, multiple scenarios are possible. “It’s important to define multiple possible outcomes of the Brexit negotiations. Will future trade relations be like FTA or WTO? Businesses have to understand the trade-off between business fit and cost of alternative locations versus UK locations under different scenarios. It is advisable to identify a number of viable back-up locations for future detailed investigation when a particular scenario materialises” adds Richard Doherty, Deloitte’s Brussels-based Brexit Services Coordinator. “The same goes for customs. Brexit can shake up every supply chain, but can also be an opportunity to enhance your customs compliance and procedures.”