On the eve of this week’s European Parliament elections, new research from Grant Thornton reveals that British businesses are far more opposed to further integration than their European neighbours. At the same time, support for further EU integration is also slipping in the eurozone’s two biggest economies and advocates, Germany and France. According to Grant Thornton, this drop in support within Europe’s major economies could impact the pace and extent of further integration across the EU.
The findings, drawn from Grant Thornton’s annual Future of Europe report, show that when asked if they would like to see further integration between EU member states, the majority (57%) of British business leaders say that they do not want to see any further integration at all. This is comfortably the highest level of opposition across any European economy - the next highest is Netherlands on 26% - and well above the EU average of 22%. Furthermore, when asked about the future of the euro, just 17% of British businesses said they are keen to see it expand. This is an increase on last year but still significantly lower than in most other European countries.
Interestingly, despite majority reluctance to embrace further EU integration, a small group of British leaders are championing the cause for greater economic integration. 31% of British business leaders say they support further economic integration, up 11 percentage points on last year. However, this remains the joint-lowest level of support for economic integration across Europe.
Scott Barnes, CEO of Grant Thornton UK LLP, commented: “As the debate rages over the UK’s position in Europe, its business community has spoken unequivocally about the prospect of further integration. I wouldn’t say that the UK figures equate to an ‘anti-Europe’ stance, especially with the pocket of support emerging for greater European integration, but they certainly show a much greater reticence to further ties than the rest of our European neighbours.
“As the UK Government’s efforts to renegotiate the terms of its EU membership begin in earnest, it’s vital that the business voice is heard. The message being delivered loud and clear is that British firms have serious reservations about greater EU integration.”
Support for integration falls in Germany and France
The research from Grant Thornton reveals that while broader business support for the eurozone and the euro area remains strong, support for further European integration has fallen away markedly in France and Germany, the architects of the EU project. In Germany, 55% of firms are now open to further economic integration, down 20 percentage points from this time last year; in France, support has dropped 12 percentage points to 57%.
Similarly, support for further political integration in Germany has fallen from 61% in 2013 to 53% this year, and in France from 35% to just 22%. The proportion of business leaders in France and Germany who do not want to see any further European integration have risen by 9 and 12 percentage points respectively.
However, business support for further EU integration is picking up elsewhere. Support for greater economic integration is increasing in a number of economies including Ireland (50% last year to 77% this year), Poland (54% to 67%) and Italy (56% to 61%).
Scott Barnes added: “France and Germany have historically been the driving forces behind the EU project and together they account for nearly half of eurozone GDP. Despite vastly different economic performances since the financial crisis, they now appear united in an increased loss of faith in further integration."
“More broadly, there’s no doubt that the picture across Europe is much brighter now than it was twelve months ago. But the recovery is a fragile one – Europe is not out of the woods just yet. Deflation is a growing concern, as is the plight of youth unemployment which is still unacceptably high. A loss of enthusiasm over the euro project from French and German business leaders could have a crippling impact on the recovery across the region, and derail the forward progress we've seen as of late."