By Daniel Hunter
New research from the Grant Thornton International Business Report (IBR) reveals that businesses in the three biggest European Union economies are showing divergent views on the eurozone’s economic future.
The research highlights a concern that a lack of clarity of vision on the bloc’s direction could lead to crippling business uncertainty and ultimately damage growth prospects.
The IBR indicates that businesses in Germany are far more open to further integration compared with their French counterparts, echoing German Chancellor Angela Merkel's calls for deeper union. 61% of German businesses support further political integration and 76% further economic integration, compared with 35% and 69% in France respectively.
UK businesses show a marked lack of support for deeper integration with only 20% behind deeper economic integration, and just 6% supporting closer political ties in the eurozone. This reflects recent comments made by former Chancellor of the Exchequer, Nigel Lawson, on Britain’s future in the European Union.
The research also asked eurozone businesses how they viewed their country’s membership in the euro thus far. 85% in Germany view membership as positive, up from 79% last year. By contrast, the proportion in France describing their membership as positive fell from 71% to just 64% - the joint lowest level in the eurozone.
UK businesses remain sceptical towards the UK joining the eurozone. Only 11% of those surveyed would like the UK to adopt the euro, and over three-quarters (76%) believe that the UK will never join the eurozone. However, 80% of UK firms want to see the euro survive, despite the ongoing sovereign debt crisis, with the majority of these acknowledging that some countries may have to leave the eurozone in the future.
"It's really interesting that at a time where there is a demand for cooperation on a global scale we are seeing business opinion in Europe's three biggest economies diverge, on both a political and economic level," David Maxwell, Partner and National Leadership Board Director, Grant Thornton UK LLP, commented.
"With the region recently having been through perhaps its most challenging spell since the EU was created, and the Italian elections and the bailout of Cyprus telling us the crisis is far from over, our report, which shows the glaring difference of business opinion between the major EU economies, highlights one of the critical challenges facing the European leadership. It also highlights how vital it remains to encourage business leaders to make the investments that will lead to jobs and growth."
Generally businesses outside the eurozone are less supportive of further European integration, heightening fears of a 'two-speed Europe'. Just 14% of other EU businesses support further political integration, and 32% economic integration.
A further 29% from these economies do not want to see any further integration, compared with 9% in the eurozone. Meanwhile, the appeal of the EU is fading to business leaders outside the union: 51% believe further integration would be an advantage, down from 62% 12 months previously.