Majority of Europe’s business leaders fear Brexit will harm the Eurozone economy more than Grexit
The majority of European business leaders are more fearful about the impact of Brexit on the Eurozone than Greece dropping out of the single currency.
In a survey of 2,600 chief executives conducted by Grant Thornton, nearly two thirds – 64 per cent – said Brexit would have a negative impact on Europe. On the question of Grexit, 45 per cent worried it would harm the EU economy.
The gap between the two possibilities widens among none Eurozone members with the numbers switching to 72 per cent and 46 per cent respectively. In the UK itself, 72 per cent of the firms surveyed said they feared Brexit would be bad for the EU while 84 per cent of Greek businesses think Grexit would hit the European economy.
The poll – part of Grant Thornton's Future of Europe report – argues both prospects could have a destabilising effect on the European economy.
Greece is still in dire straits and has to cough up close to €1bn (£720m) to the International Monetary Fund (IMF) in May. But European leaders have become more comfortable with the prospect of Grexit as the Eurozone economy gradually returns to health.
Grant Thornton's chief executive-elect Sacha Romanovitch said:"Relations between Brussels and London may not always be comfortable, but there’s absolutely no doubt that Europe’s business community values the UK’s membership extremely highly."
The outcome of the General Election just days away will be critical for Britain's future relationship with Europe.
The Conservatives are pledging a renegotiation of the UK's terms of membership followed by a referendum while Labour have ruled out a referendum altogether.
But the possibility of British withdrawal may not be a wholly bad thing for Britain's position in Europe, Romanovitch noted.
"This aversion to a Brexit arguably gives the next British government a strong hand when it comes to seeking reform in Europe – and may test President Juncker’s reported refusal to consider any major EU treaty changes," she said.
But Grant Thornton warned Europe's political leaders to prepare for all eventualities and maintain an environment where Europe's fragile economy can continue to recover:
The European economy appears to have turned a corner after years in the economic doldrums, so we must hope that policymakers in London, Athens, Brussels and other capitals are focused on maintaining a stable environment for businesses across Europe.
A host of surveys has showed extreme scepticism from the business community about the wisdom of Brexit. On Tuesday, a new study found that 55 per cent of finance workers said a Brexit would be a bad idea – while 20 per cent didn't know, and 14 per cent wanted a "third way".
Earlier this month, ratings agency Moody's said British withdrawal from Europe could cause more damage to the country's credit rating than the uncertainty following a hung parliament.
However, the business world may have little reason to fear from an EU referendum with support for staying in the EU running 10 points ahead of those who want to withdraw.