With the threat of Britain leaving the EU, many businesses are starting to worry. Markets do not like instability or uncertainty. But this analysis is half-hearted. Taking the step from information to wisdom often requires taking the longer and wider view.
On Tuesday the Nordic Chambers of Commerce have a “Nordic Business Forum” a joint event in London to discuss Anglo-Nordic business relation, or specifically Brexit from a Nordic business perspective.
I will speak with the objective of pointing out the opportunities for growth that are embedded in the British whistle-blower crusade.
Just to set the record, Nordic businesses often have a hard time understanding the British EU debate. Simplified, the Nordic countries are mostly stuck in the “yes-no” polarity of the last century. British debate has moved on, containing certain “inners” and “outers”, but with a larger group of “reformers” in between, a sort of fifty shades of grey landscape of EU analysis, with much detailed knowledge of the various aspects of EU. What this means? Britain is a country where also smart, savvy and wise people can be outers, with clear and coherent arguments to show for it.
Secondly, EU discontent is steaming all over Europe. Brexit. Tensions in the Schengen area and how to uphold the external boarders in the light of millions of refugees, the simmering Eurozone crisis, and now Hungary announcing its referendum on the EU migrants solution. This will, together with the Brexit referendum June 23, be the FIFTH EU referendum in the union within a year. (Earlier Greece, Denmark and Holland). What this means? Not only Brits are moaning.
Now-forward. Three opportunities embedded:
1. The competitiveness agenda that is being pursued by Britain. Cutting red tape and enhancing free flow of services is key to a reformed Europe. Today services constitute 70% of the output, but only 20% of the internal trade within the union. Releasing this effective trade block could add an extra 2% to GDP within the union. The British agenda on this matter is a no-brainer for companies all over Europe, no matter if you produce Finnish paper machines, are a Swedish biotechnology company, export Danish bacon or want to sell Norwegian off-shore knowhow.
2. The status between non-euro and euro-zone members. The five Nordic countries all have their different stories. Some are EU members, some not. One is a Eurozone member, the others not. Some are NATO members, the others not. But all five markets are dependant for capitalization on the financial markets in London, which will be further protected from the Eurozone problems through the special status that the UK has been granted.
3. Free trade and jobs. First some politics. Without the UK, the free-trading “beer” voting block in the EU will be brittle and have a hard time resisting protectionist impulses from the votes of the “wine-belt”. Hence the UK creates a cornerstone for free trade, both in terms of political agenda both also in terms of “realpolitik” and voting. The UK economy is growing faster than the EU average, the Anglo-Saxon job-market proving to respond better to the needs of a globalized economy than more static labour-markets. The UK noice-making is therefore a good reminder to more rigid economies that the EU needs to stay flexible to keep members AND compete globally.