© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
December 9, 2011 6:47 pm
Fear that the summit outcome would fail to resolve the eurozone crisis was a bigger immediate worry for many UK businesses than concern about isolation as a result of David Cameron’s veto of a European Union-wide treaty change.
“The most important thing for UK manufacturers was a resolution of the eurozone crisis and it is still not clear whether this medium-term set of institutional changes will address the short-term debt and banking crisis,” said Terry Scuoler, chief executive of the EEF manufacturers’ organisation.
In the longer term, the summit could have “profound implications” for Britain’s relationship with the rest of the EU, he added. “We need the government to develop a clear strategy for engaging with other member states when in theory it could find itself isolated on occasions.”
John Cridland, CBI director-general, said: “New fiscal rules seem to be coming together but the all-important question of lender of last resort does not seem to have been resolved yet. The markets will decide if what has been done over the last two days is enough.”
Business for New Europe, a pro-European lobby group, warned that by preventing other countries from using EU institutions to oversee their agreement on limiting debt, the UK had “put the eurozone in danger and therefore British jobs and our wider economy at risk”.
Phillip Souta, the group’s director, said that increased the risk of markets rejecting the deal, which could lead to a euro collapse. He warned that, by alienating other countries, Britain could find itself outvoted on future financial services issues.
Graeme Leach, chief economist at the Institute of Directors, said the prime minister was right to reject a treaty change because he was “ultimately going to have to agree to something down the line which was going to be very damaging to the City of London”.
But David Watt, the IoD’s executive director in Scotland, said: “What happens if Britain becomes potentially a second-tier nation in Europe, which takes a massive amount of exports from Scottish companies? It is a very real concern.”
Jonathan Duck, chief executive of Amtico International, a floor tile manufacturer, said Mr Cameron was right “not to get to sucked into the euro crisis”. He was not worried the UK would be at a disadvantage. “This is a Foreign Office mentality that we don’t want to be left outside the door. I think the dangers are much overstated.”
Some businesses said the summit outcome had increased uncertainty. “We are more nervous today [Friday] than we were yesterday [Saturday],” said Peter Mathews, chief executive of Black Country Metals, which processes industrial scrap and other metals for export. “I watched the body language between Sarkozy and Cameron and it wasn’t good. For business, if that becomes an anti-British feeling in Europe that is not going to help confidence.”
Frank Roberts, deputy chairman of family-owned Roberts Bakery in Northwich and a Conservative supporter, said: “David Cameron has done exactly the right thing by not accepting the proposed tax on financial transactions in the UK.”
Tony Rafferty, chief executive of Printing.com, a Manchester-based printing business with a Dutch operation, said the recovery of the eurozone was vital. “More than 50 per cent of our revenues are likely to come from the eurozone potentially growing further.”
Additional reporting by Andrew Bolger, Andrew Bounds and John Murray Brown
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in