Bernard Spitz is president of the French Federation of Insurance Companies and director of the international and European divisions of Medef, France’s biggest business lobby.
Spitz spoke to Cécile Barbière at Medef’s 18th summer university this week.
Great Britain voted to leave the European Union in June, but the government has still not activated Article 50 of the Lisbon treaty to begin the exit negotiations. Should the British prime minister accelerate this process?
Theresa May is a more than capable leader and she took charge in very tricky circumstances. But this is precisely what I find worrying: that such an organised person should hide behind the idea that the United Kingdom is not ready to leave the EU.
The longer this period of uncertainty drags on, the weaker Europe’s ability to react will become. Both in terms of establishing cooperation between the United Kingdom and the rest of the EU, and the bloc’s ability to deal with the challenges it faces. The main challenges are of course the Union’s credibility among the general public and the economic impact of Brexit.
My worry is that the EU’s relationship with its citizens will be damaged. From this point of view, a Brexit that drags on too long would be harmful. I have too much faith in Britain’s excellent diplomacy and administration to believe that the UK is not ready.
Is the impact of Brexit on the European economy a major concern?
Brexit has weakened the UK to a certain extent. It was the pound that suffered, not the euro. And this was not a foregone conclusion. Impact assessments vary dramatically for each sector, and nothing is certain.
So we have to start making progress now. The French feared this referendum result, particularly Medef. In our own modest way we supported a different outcome. But now we have to deal with the situation, not deny it.
Another problem is the great uncertainty surrounding the United Kingdom’s future relationship with Europe. But in the meantime, Europe must keep moving. Take the example of insurance, an extremely important market that has repercussions on the whole of the European economy. The Solvency 2 Directive (which governs the market) should be revised so as not to penalise investment. It is not in line with the new global situation, as David Cameron said.
This directive must be revised in the next two years. But the United Kingdom is the leader in the insurance sector. So London will fix the rules that it may not even adhere to. That poses a major problem. And this is true not just of insurance but of other domains too.
The situation urgently needs clarifying. From this point of view, the wise thing to do would be to apply the conflict of interests rule. In case of the risk of a conflict of interests, the party at risk should withdraw from the discussions and just become an observer.
But wouldn’t efforts to keep the Brits at arm’s length during the Brexit negotiations just hold up the European machine?
We have to remember that the problem here is the United Kingdom, not Europe: it was London that wanted this referendum, that organised it and set the date and the rules. So any suggestion that the UK is not ready is simply not acceptable. This was not some incident beyond their control. They chose it and now they should deal with the outcome rapidly so that Europe can get moving again as soon as possible.
But the UK’s exit could also bring certain benefits. I am thinking, for example, of the Paris financial centre, which could take over some of the City’s activities.
Nobody in France wanted Brexit. But it is unrealistic to think that London’s financial centre can keep working the way it did before. The City has to put an end to this denial. If it will not apply all the EU’s rules, it cannot be allowed to keep its dominant position. The City knows this. That is why the UK’s bankers were so resolutely opposed to Brexit. But they failed to make people understand how their position benefits the country as a whole, not just to London.
As the situation changes, a certain number of people will have to move in order to keep their jobs. And Paris is obviously one of the capitals in line to replace London.
Even the mayor of Paris and the president of the Île-de-France region, from opposing sides of the political spectrum, managed to agree on this. And they will both be in office for the next two or three years. This message is rare enough to inspire confidence from the outside.
We have been given tangible guarantees on the status of impatriates [people returning to their home country from abroad]. But we need to build this trust in the longer term, because the French are well-known for changing their minds. So we need to make it clear that we are in this for the long run, to make Paris a welcoming place, because Frankfurt, Rome, Amsterdam and Dublin are all serious candidates.
France appears to have gone into reverse over the trade negotiations with the United States. What is Medef’s position on this?
We have always been a supporter of trade negotiations, particularly these ones, on the one condition that they are balanced. That they should be difficult, that they should be strained, this is perfectly normal.
Free trade, when it is well regulated, brings economic growth, employment and peace. Any deterioration of free trade into protectionism is a backward step towards economic depression and conflict.
We should not just accept these agreements under any conditions, but we should fight for them. If we do not make this deal now, another similar deal will be struck between the US and Asia in 20 years’ time. Europe will then end up being bound by standards it was unable to influence. Then we will say we missed the boat twenty years ago.