Business uncertainty over E.U.

Is Britain In or Out?

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David Cameron has failed to reassure businesses with his promise to hold a referendum on E.U. membership if he wins the election.
  • Why it matters

    Why it matters

    Uncertainty over a referendum on E.U. membership is causing instability in Britain’s business sector and making long-term planning difficult.

  • Facts

    Facts

    • Britian goes to the polls on Thursday in the closest fought election in a century.
    • The ruling Conservatives are neck-and-neck with the social democratic Labour party in polls.
    • The Conservatives have promised a referendum on E.U. membership, Labout has ruled one out.
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    Audio

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There is anything but joyful anticipation. “Great Britain will lose no matter who wins the elections,” warned Sir Martin Sorrell, the influential boss of the London-based advertising giant WPP, recently. He shares his unease with many British businessmen, because no matter what the outcome of the general election on May 7, they already see themselves as the loser.

Businesses in Britain, Germany’s second most important trading partner in the European Union, would seem to have every reason to be hugely optimistic, as the island’s long-term crisis is over at last. The country’s economy is likely to grow by 2.5 percent this year. That is around twice as much as is predicted for the whole of the euro zone.

And yet the business world is deeply concerned. It worries that despite the growth, there is great uncertainty about the economic direction politicians will take.

The election is reminiscent of the worldly wisdom spouted by the movie character Forrest Gump when he likens life to dipping into a box of chocolates: “You never know what you’re gonna get.” Analysts speak of the least predictable election outcome in almost a century.

David Cameron’s Conservatives and the opposition Labour Party, a social democratic party led by Ed Miliband, are neck-and-neck in opinion polls. Despite its first-past-the-post voting system, the country will probably have to get used to an unfamiliar, uncertain power structure, coalitions or a minority government. Many chief executives would therefore prefer it if there was no vote.

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