Yahoo Finance European businesses' biggest fear: the breakup of the EU
European businesses’ greatest fear is the future of the European Union, according to analysis by UBS.
The Swiss bank said in a note to clients on Friday that its survey of 600 business leaders across Germany, France, Spain and Italy found their number one concern is “uncertainty about the future of the European Union.”
37% of respondents listed fears about the future of the EU as the number risk to their business. Brexit was the second biggest fear, with 33% of executives naming that as the number one risk.
Fears about the future of the EU and Brexit both increased in the third quarter compared with earlier periods, UBS said.
“The details of the survey reveal a deepening in EU-related concerns across all surveyed countries except Germany,” economist Anna Titareva and her team wrote. “Spain and Italy, in particular, registered the largest increase in negative attitude vis-à-vis the EU.”
51% of businesses in Italy said fears over the future of the EU were having a negative effect on their business. The figure was 36% in Spain.
“There have been many political concerns, such as events in Italy, potential trade wars and Brexit,” Titareva and her team wrote. “All of these were a headwind on European equities’ multiples and performance.”
READ MORE: Why taking no-deal Brexit off the table is good for business
35% of executives surveyed said they planned to reduce investment in the UK as a result of Brexit. 15% said they were planning to increase investment and 48% said Brexit had no effect on their investment plans.
39% of European businesses with UK operations said they planned to pull substantial capacity out of the UK due to Brexit. Of those looking to move business operations out of the UK, 48% said they would move staff and operations to somewhere within the eurozone.
The survey, which is part of UBS’ Evidence Lab series, was conducted between the start of November and early December.
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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.
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