Business says Britain's place is at EU's heart

Mon Dec 12, 2011 1:07pm EST
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By Sudip Kar-Gupta and Fiona Shaikh

LONDON (Reuters) - Britain should stay at the heart of Europe, industry executives said on Monday, with some of them warning that Prime Minister David Cameron's decision to opt out of a common European Union fiscal policy may make life more difficult.

Martin Sorrell, chief executive of the world's largest advertising group WPP told Reuters that Cameron's decision to veto a 27-nation deal, potentially isolating it within the bloc, "doesn't seem to be the best way".

"Intuitively, it seems to me that it would be better to be on the inside of the tent than the outside," Sorrell said on the sidelines of a conference in London. "It seems to be more about politics than economics."

Critics of Cameron's stance say this will make it more difficult for Britain to influence policy making within the European Union and risks alienating those partners who have traditionally been sympathetic to Britain's pro-market, anti-federal stance.

"The immediate challenge for us will be exerting influence over EU regulations that will affect the UK financial services industry and its customers," the Association of British Insurers (ABI), which represents funds managing 1.7 trillion pounds ($2.7 trillion) of assets, said in a statement.

There are also implications for specific policies where Britain had worked hard to build a support base.

Germany, Poland, Austria, Hungary, Malta and Cyprus, for example, had voted with Britain to opt out of the Working Time Directive governing working hours within the EU.

"There are practical implications, like voting in the EU Parliament and EU Commission on blocking issues like the Working Time Directive, which would have serious implications for business here," a spokesman for the Engineering Employers' Federation (EEF) told Reuters. "But it's too early to tell what the impact on those blocking minorities will be, or whether we will be damaged by suggestions we will be isolated."   Continued...