Brexit: Swiss companies becoming increasingly nervous

Zurich, 21 June 2016

Concerns about the consequences of the UK potentially leaving the EU have now reached company managers in Switzerland.

A poll of 116 Swiss-based CFOs carried out by Deloitte in March showed merely 17% expecting a negative impact on their own company in the event of a Brexit – but by June this had risen to 40% (of 112 surveyed in the latest poll).

At companies with a strong international focus, as many as half (49%) assume the impact of a potential Brexit on their company would be negative.

Companies bracing for the worst

The latest opinion polls in the UK indicate that the result of the vote on 23 June will be close. The nearer the Referendum date draws, the greater the nervousness on financial markets – and now also among Swiss CFOs. Many companies fear greater complexity and rising costs arising from a Brexit scenario.

Firms in all sectors potentially affected are thus preparing themselves for possible scenarios as to manage the impact on their business: fewer export opportunities, new risks and a review of value chains and strategic investments are just a few of the possible challenges companies may face from Brexit. As we haven’t witnessed a similar situation before, such plans are by their nature highly uncertain.

Impact on Switzerland

If Brexit does occur, considerable resources in Brussels will be tied up on the repercussions for some time to come. It may well be that issues affecting Switzerland slip further down the list of priorities. Greater uncertainty within the EU could also increase the appeal of the Swiss franc as a safe haven again.

The lack of certainty and the fact that no similar event has occurred before makes it difficult to forecast the impact. Obviously, uncertainty will rise and volatility, for instance on the financial markets, will increase. If the UK decides to remain in the EU, the excitement of the past few weeks will calm down very quickly. Even in that case, however, it would be desirable if the EU were to see the Referendum as a warning sign and redouble its efforts at reform. Regardless of what happens, the Referendum has highlighted areas where improvement is needed to such an extent that it would be unfruitful to go back to the same old agenda.

Do also have a look at the blog posts by Deloitte UK’s Chief Economist, Ian Stewart (@IanStewartEcon): EU referendum - everything you need to know (except the result)

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