Today the Podcast Podcast Economy
Is France ready in case of hard Brexit?
With the ongoing political crisis in the UK, the prospect of a tough Brexit within three weeks appears more and more likely. Is France and its companies sufficiently prepared for this break without a net?
Given its proximity to the British coasts, there are only 23 kilometers between Dover and Calais, France is in first line. A quarter of the goods exchanged between England and the Twenty-Seven take the Channel Tunnel, not to mention the ferry traffic. Companies and the state have therefore worked hard to ensure the fluidity of this traffic, priority of all economic actors. Customs, air and border police, sanitary services, public services which had disappeared in these places of transit that are the ports of Hauts de France, Brittany and Normandy, are or will be reactivated. France prides itself on being the best prepared state in the whole Union.
Large groups have all dedicated budget and staff to this divorce
This sometimes involves investments in digitization, by recruiting agents to carry out administrative procedures in the customs area. Despite this anticipation, companies remain very worried, especially in the automotive industry, by far the most integrated. Inventories built to avoid delays in case of traffic jams will not allow to stay very long in this industry accustomed to just in time according to Marc Mortureux, the general manager of the car platform. Not to mention the medium-term consequences. A complete review of the chain of values and likely relocations from the United Kingdom will suffer French suppliers. And price increases with the reappearance of dissuasive tariffs. French exporters have already lost much in Brexit, Euler Hermes estimates their shortfall to 6 billion euros since the referendum in June 2016.
Are small businesses also savvy?
This is the big unknown. That's why Bercy called yesterday for the general mobilization. A total of 30,000 French companies export to the United Kingdom and are therefore directly or indirectly concerned by Brexit. But for small businesses with already stressed finances, no question of spending a euro to provide a service that is not 100% sure to make use of it, says Jean-Marc Roué the president of Britanny Ferries. The other great fear of all the operators is the others: the small French, but also the small carriers or exporters coming from other countries than France, those of Eastern Europe among others and which converge towards the ports French. Do they have the information, the means to face up, will not they stop the circulation by their unpreparedness? It is impossible today to answer this question.
Despite all the measures taken by the state, the assumption of traffic congestion remains the biggest fear of carriers?
" We are in economic risk zone " warns Jean-Marc Roué the boss of Britanny Ferries. To prevent the natural market that France holds from sliding towards the North of Europe, it is necessary to do everything and even more so that the fluidity is at least equivalent estimates it. His company has invested 400 million euros in the purchase of new boats, history to keep the same pace and open new lines, to Ireland for example. Brexit is certainly a risk, but also an economic opportunity that the most agile have already seized.
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