EU Referendum Briefing: A European Perspective by Edelman

BREXIT ANALYSIS – PRESENTED BY EDELMAN

BREXIT

23 JUNE 2016

A EUROPEAN PERSPECTIVE

MMO O N NT HTH S S

DAYS DAYS

Introduction – Stephanie Lvovich REMAIN

FINAL RESULT

LEAVE

48.1% 51.9% VOTER TURNOUT As the fallout from Brexit continues to send shockwaves across the globe, companies are asking themselves what now? Given the highly volatile environment that Europe finds itself in today, there are a number of considerations that should be front of mind for business and business leaders. Whilst there are many unknowns, we believe that there are a number of public affairs related opportunities that arise from the Brexit vote that businesses should seek to leverage for as positive an outcome as possible. The UK government will have to decide how much of the existing EU-based law it retains and how much it changes, across every sector. It will be a ‘decade worth of Queen’s Speeches’ in terms of the volume of laws to be reconsidered, given the legislation adopted in the UK that has originated in the EU. The UK government will open up many pieces of legislation for review, which presents an opportunity for clients to change legislation to better support their freedom to operate. The challenge will be that in order for the UK to continue to trade with the EU, its products/services will need to comply with EU legislation and there the scale of potential change is not yet clear. Clients should be identifying those pieces of EU-generated legislation that have been adopted by the EU that are particularly problematic for them and put together POV/argument as to why they should change, and how they should change. Given the upcoming change in Conservative Party leadership and a new government, there will be an opportunity to shape the priorities and proposed legislation of the new government following the resignation of Prime Minister David Cameron. Finally, the British voice, POV and leadership on key pieces of EU legislation under consideration in Brussels currently will ultimately cease to exist. Resignations by UK members of the EU Parliament and Commission have already begun. Those clients seeking to manage EU legislation in process at the moment should factor in how this will change the dynamics of issue discussions and re-orientate their strategies

72.2% accordingly, particularly in situations where the UK representatives have been leading. In order to be best placed to leverage these opportunities, it is important that businesses take a proactive approach to communications, with a focus on the following over the next year as the situation continues to unfold: • For those businesses that had expressed a view for either side of the debate, continuing to manage the message and business reputation is key in the weeks ahead. Not only your external facing messaging but also your employee communication will be key as concerns about what the business implications of Brexit reverberate. • In both the UK and the EU expertise in managing an exit from the European project is limited and therefore any offer of assistance or support from business is going to be extremely welcome. Civil servants and bureaucrats in both the UK and Brussels will be looking for partners who can work with them on a range of issues. • As the UK moves to finalise its settlement with the EU, businesses are likely to be widely consulted to best understand which Directives and Regulations are key for the business community and which are less relevant. Ensuring your business is ready with a strong viewpoint, based on your own business analysis, is going to be extremely important in the months ahead. • Monitoring, understanding and analysis has never been more important. Ensuring your business has the right support to understand both what is happening but also how best to plan ahead of the cycle is going to be key as you move into the weeks and months ahead.

Stephanie Lvovich Global Chair of Public Affairs, Edelman

Insights into the EU Referendum If you are interested in receiving further insights on Brexit and the EU Referendum, please contact Gurpreet Brar on gurpreet.brar@edelman.com and 020 3047 2466 for further details.

Analysis from the UK The UK voted to leave the EU by a margin of 51.9% to 48.1%. Scotland, London and Northern Ireland were the only regions of the UK to vote to remain in the EU. The dynamics of the result suggest one of the decisive factors was the support of many traditional Labour voters for leaving the EU – indeed, the Leave camp swept all of Labour’s traditional strongholds in the North of England, Midlands and Wales. Mirroring the General Election result, the Remain campaign was only successful in liberal, metropolitan parts of the UK, especially London and affluent parts of its commuter belt, and in Scotland. Turnout, at 72.2% was much higher than anticipated by many, but it was not driven by a surge in younger voters – but instead driven by higher than usual turnout in many traditional Labour areas, and by a huge turnout in rural communities. The referendum is further evidence for the tendency that contrary to widespread assumptions higher turnout boosts the vote for the right. At the start of the campaign David Cameron was Britain’s most trusted politician, and it was anticipated by many that this would carry through into victory for Remain. Instead, it was public trust in the Prime Minister which declined. In final polls, even those which inaccurately suggested Remain would win, it was consistently clear that a majority of the public did not believe the warnings about the economic impact of leaving the EU or trust what the Prime Minister was saying to them – and that fact, above all others, was probably decisive. His resignation was entirely unsurprising in this light. The result is also vindication for the strategy of the Vote Leave campaign. While it was derided by some commentators as a “core vote” strategy, their focus on linking EU membership to concerns about immigration, and their consistent messaging to “vote leave, take control” proved that rather than being a narrow strategy, it was simply a clear and effective one. Again, the parallels with the Conservative approach in the 2015 General Election are clear. What next on withdrawal The Prime Minister has stated that he will leave his successor to enact Article 50, with the process of the UK’s exit now including the leadership race: • A new Prime Minister is elected in time for the Conservative Party Conference in October • The new Prime Minister holds consultations with business, the Bank of England, the Cabinet and other relevant organisations to decide upon a preferred future relationship with the EU • The UK government triggers Article 50 – either at the end of this year or early in 2017 • The European Commission seeks a mandate from the European Council to undertake negotiations on

UK withdrawal from the EU – all other member states must agree to guidelines for negotiation • The European Commission will then undertake negotiations with the UK to agree its withdrawal from the EU. Existing EU Treaties will remain in place • The withdrawal negotiations are subject to a 2 year deadline (June/July 2018) • If an agreement has not been reached by this point, the EU member states must agree unanimously to extend negotiations or the UK will immediately leave the EU regardless of whether a replacement relationship is in place. • If a deal is reached, it requires approval from the European Council (by qualified majority: 20 out of 27 member states) and the European Parliament. (PLEASE NOTE this has been challenged by the EU institutions who want the UK to move quickly to enact Article 50)

Options for a new model for the UK’s relationship with the EU The period between the election of a new Prime Minister and the triggering of Article 50 will be critical in determining the terms of the UK’s new relationship with the EU that we will seek – and during this time, business, trade unions and other organisations will be expected to make clear their views regarding the best future relationship with the EU. The main options are: • Norway-EU agreement: gives significant, but not total, access to the EU Single Market – in return, the UK would be required to accept freedom of movement, wide-ranging EU obligations and contribute to the EU budget • Swiss-EU agreement: close to the Norwegian model but with only partial access to the Single Market in goods and more limited access in services. In return the agreement gives Switzerland greater legislative freedom from the EU • Canada-EU agreement: a more detached relationship with the EU, with significantly less Single Market access than the Swiss model, but free from obligations on free movement of people and contributions to the EU budget • Turkey-EU agreement: a loose free trade agreement with some sector-specific access to the Single Market • World Trade Association membership: the default fall-back option, marking a decisive break from EU membership What next in the UK • A new Prime Minister – the Prime Minister has announced he is resigning and has triggered a leadership contest in the Conservative Party. Early money should be placed on Boris Johnson to lead the country, having lead the right of his Party to victory over Europe. However, Theresa May’s statesman-like approach to the referendum also holds her in good stead. The Party will look towards Michael Gove to be king maker following his role in recent weeks.

• Future of the UK - there are serious concerns about the future of the United Kingdom. With Scotland strongly backing remaining in the EU, the SNP has already called for another referendum on independence. The status of London, which strongly supported remaining in the EU, within the UK, may also be fundamentally transformed as a result of this vote and many questions are arising about the future of Northern Ireland and the peace deal. • What this means for UK policy - just a few weeks ago there was a Queen’s Speech outlining policy priorities. Mr Cameron did mention in his pre-resignation statement that he would be taking forward the legislation announced in it. There were some meaty proposals – not least substantial reform of the prison service and far-reaching measures on public health. But there must now be a huge question mark as to whether any of it can be delivered in practice. Can a Prime Minister with three months to go really make decisions ranging from Heathrow expansion through to the Government’s digital strategy. • The Labour Party – calls are mounting for Jeremy Corbyn to also resign as leader of the Labour Party. If a leadership contest is called it will be the first time in UK history that both parties are simultaneously electing their leader.

the key findings in our 2016 data. First, Trust outlined that poorer Britons trust the government far less than richer ones. The result demonstrated this starkly with poorer Britons overall voting to leave with more affluent areas of the UK responding differently. Second, Trust outlined that disengaged Brits struggled to name key mainstream party leaders and that they wanted more straight-talking political leaders. Both Boris Johnson and Nigel Farage benefited from this insight demonstrating throughout the referendum a natural ability to connect with certain aspects of the electorate. Third, during the Trust launch Ed Williams highlighted the importance of immigration as a key debate and its likely ability to dominate the EU referendum. This has turned out to be the case with the debate being the deciding factor for the outcome, outshining economic concerns to the surprise of the Prime Minister. Fourth, peer-to peer influence in the referendum debate was a real game changer. Experts, business leaders, academics and many others failed to resonate or punctuate the peer-to-peer community conversations that dominated the campaign. Despite the efforts by the Stronger In group, traditional spokespeople struggled to cut through as strongly as had been hoped for.

Implications for Trust The referendum result linked directly back to Edelman’s Trust Barometer for the UK and some of

Gurpreet Brar UK Managing Director for Public Affairs

Brussels: what next? Next year, the EU is set to celebrate the 60th anniversary of the Treaty of Rome, the foundation of today’s European Union. European integration and cooperation started from the idea of ‘never again’. The British people’s decision to leave the EU is something we’ve experienced ‘never before’. The political and business community are well aware of the need for speed and certainty, as Europe has experienced the devastating combination of economic depression and rising nationalism before. President of the European Parliament Schultz stresses that EU Heads of State and Government and leaders of EU institutions now have a duty to provide the maximum degree of legal, political and economic certainty to the citizens they represent. Industry leaders’ say it’s essential to “Keep calm and carry on” in order to minimise the adverse consequences of this vote. There are many known unknowns. How the rest of Europe and the EU will respond, what will happen in terms of process, and by when, are big variables in this case. The initial reflexes however show a divided United Kingdom, in an increasingly divided Europe. This precarious situation requires strong leadership at both EU and member state level, and provides an almost compulsory opportunity to reframe the purpose and functioning of the EU as we know it.

Where to start? By correcting the crucial mistake that the UK and EU’s leadership made to not ‘Mind the gap’ – the entrenched Trust gap between Europe’s elite and its mass population. The gap between generations, between urban and rural areas, and the gap caused by income and education inequality. Ironically, addressing these brings us back to the original purpose of the European project; working together to build a common future as this alone will enable them to control their destiny. If this is not addressed, Europe runs the risk of seeing its underlying sovereignty principles from the Peace of Westphalia transform into a Europe of the Regions. To prevent this transformation, the European project needs to evolve, to maintain or regain its relevance, to adapt its operational model and leadership position. It must do a better job at promoting its value and relevance, by ensuring that all assets of its ‘brand’ and proposition are understood and appreciated by EU citizens. This will enable the ability to protect the European idea beyond managing the current crisis to building a robust reputation that sustains stakeholder goodwill. Esther Busscher General Manager, Edelman Brussels

Views from the Continent – GERMANY Everybody in Germany knew Brexit could happen, but most of the political decision makers, C-Level or opinion leaders did not believe it would. Therefore the shock about the outcome of the referendum was/is huge. Polls before the referendum showed that about 80% of the Germans wanted the UK to stay in the EU. It will take a time until there can be a focus on the possible new chances that will open up for Europe. Right now everybody tries to learn from the result and the reasons for it. The aim is to stop a possible process that could weaken the EU even more. During the last 48 hours many people stressed the importance of the EU for 70 years of peace in Central Europe. Most of the people fear a new successful wave of nationalism (whether from the left or the right) in Europe (such as in Poland and Hungary). There is a clear fundamental belief within the huge majority of the Germans that we need the EU for our future. Nevertheless, there are several areas where the EU has not been successful in convincing the German public of its importance e.g. refugee crisis, Euro crisis, the structural deficit of many southern countries like Greece, that had and has to be financed by huge guarantees from Germany. That’s why we can’t be sure that the loyalty to the EU will stay as strong as it is or was. The majority of the informed public believe in the general idea of the EU. But we just saw in the UK this is not enough. The German government is facing several dilemmas. If they were to send out the signal, we will support the European idea, no matter what it takes, they can easily be blackmailed by the majority of the EU member states if it comes to financing new investment programmes for example. At the same time, they might lose the support of the majority of the Germans (“These people in Berlin give money to everyone such as refugees, Greeks etc. – but then forget about us, the Germans”). The nationalist and aggressively populist party of the AfD (Alternative für Deutschland, credited with a 12% approval rating in recent polls) could become much stronger. The fact that Germany has almost no problem of unemployment and one of the strongest social systems in the world is simply ignored. Even if the German government were to make a stand and try to accelerate the integration process within a “Heartland of Europe” (Italy, Spain, Benelux and especially France), it could not count on these countries as they are not stable enough (like President Hollande in France). Besides, the other European governments would blame the Germans for leaving them behind (like the Baltic states or Poland regarding the sanctions policy towards Russia). Everybody seems to be waiting for and counting on Mrs Merkel to save the EU. At the same time, as shown above, her possible actions are very limited given the instability in the EU. The picture in Germany is very clear: The political system in the EU doesn’t work

effectively. But it seems almost impossible to restructure it. The German political parties are also facing difficulties. Conservatives consist of two parties: the CSU in Bavaria and the CDU in the rest of Germany. Throughout the refugee crisis, the CSU fought intensely and in a very populist manner against their own Chancellor. With this strategy (it was the same during the Euro crisis) they damaged Mrs Merkel and tried to keep the upcoming AfD in check. This ended in failure as far as the success of the AfD in regional elections is concerned and it caused great damage to the political systems and politicians in general. Mrs Merkel has to take this into account when developing new concepts for the EU. Many party members and MPs still respect her, but they are no longer ready to obey her if she seems to be giving in too much to Brussels. The Social Democrats (SPD) are in a mess. Sigmar Gabriel, the vice-chancellor, is the head of a party that reaches a maximum of only 20% in polls. After working in a so called “great coalition” in the federal government for the second time with Mrs Merkel over the last 15 years, the party is fiercely fighting over its direction and mission. Recently, Mr Gabriel floated the idea that the SPD could vote for a common candidate with the Greens and the Socialists for the President of Germany who will be elected in spring 2017. The majority of the party is still strongly in favour of the EU, but they are afraid to lose support of the electorate. And there is a tendency towards nationalism and anti-US sentiment when it comes to issues such as TTIP. The other parties (Liberals and Greens) are generally backing the EU, but they have their own issues with it (anti-democratic for example). The AfD is becoming more radical every week. Brexit is a present for them. It has even dared to start a discussion about Jews, showing that it is leaving the common ground of political discussions in Germany. It will use almost any means to gain more support after Brexit. From the perspective of other countries Germany might seem to be the winner of Brexit, given its economic strength and huge influence within the EU. But that is an illusion. Mrs Merkel, the government and most of the parties must be very cautious in their actions if they don’t want to strengthen the nationalistic und populist forces. For the German economy the impact of Brexit is huge, but in most cases it will not be crucial. One important issue is the possible merger of the Stock Exchanges of Frankfurt and London. This opportunity might only come about if the headquarters will be in Frankfurt and not London. The worse the economic and political situation gets in the UK, the better it would be in the eyes of the Germans in favour of the EU. Nobody will officially say this, but it is very clear that everybody is keen on a very fast Brexit process with harsh effects in the UK, so no other nation will dare to opt for a similar referendum.

Views from the Continent – GERMANY Implications for Trust Given the threat of successful nationalistic movements German companies will need to convince their stakeholders (for example employees) that nationalism is not an option for Germany. That connects to the Trust results: customers are waiting for companies to take over responsibility for the major issues of society,

and thereby influence the future direction of both the society and country.

Ulrich Helzer General Manager, Edelman Berlin

Views from the Continent – SPAIN Spain’s main political parties (PP, PSOE, Unidos Podemos and Ciudadanos) are all anti-Brexit. The acting Prime Minister, Mariano Rajoy (PP), has called for political stability and a united front in the face of uncertainty. The PSOE has criticised populism and conservatives who damage the EU. Unidos Podemos has called for reforms to create a fairer EU that listens to its citizens, and Ciudadanos has railed against irresponsibility and called for leadership. In relation to the general election that took place yesterday, Brexit could have been beneficial for the PP and detrimental for Unidos Podemos, the party with the most critical stance with regard to the European model. Brexit has put the spotlight back on the independence referendum Catalonia has been demanding. A second referendum and potential reincorporation into Europe for Scotland would make Catalonia more optimistic about its own chances of independence. Economic consequences Spain and the UK have a significant economic relationship. The real impact on Spain’s GDP will depend largely on how the UK’s withdrawal from the EU develops. Spain has a surplus of 1.1% of GDP in the balance of trade and services (including tourism) with London, which means that total transactions with the UK generate a net profit for Spain of over 11 billion euros per year. The auto, agri-food, pharma and machinery industries are likely to be hit the hardest by Brexit. The weakening pound and the resulting loss of purchasing power for the British people will impact the tourism and property sectors. Brits account for a quarter of all tourists visiting Spain, with 15.5 million visitors per year; this figure could fall by 10%. The average length of stay by these tourist will also fall, and as a consequence, so will the

amount they spend. Property purchases could also fall by some 21%. Spanish companies have a strong presence in the UK. In fact, according to JP Morgan, Spain is the third-largest investor in the UK, with a total investment of 62 billion euros. Major companies like Santander, Sabadell, Iberdrola, Telefónica and Ferrovial could see their profits slashed as the pound plummets. In the meantime, Telefónica may delay the sale of O2 and the Telxius IPO. IAG has cut its profit outlook for the year. The Ibex 35 mirrored international markets and responded negatively, losing over 12 points, the largest drop in its history. Spain’s sovereign credit spread rose 40 points, bad news for the refinancing of Spain’s debt with the EU. Brexit will require a reformulation of EU member state budget contributions and Spain could be forced to pay an additional 906 million euros. Implications for Trust Brexit is both a challenge and an opportunity for Spanish businesses. The recent Trust Barometer for Spain indicates that businesses are the social players that are best prepared to assimilate major change quickly (61%), followed by NGOs (55%) and governments (41%). In fact, 80% of respondents said that companies needed to focus not only on generating profit, but also on bringing about social and economic improvements in the areas where they operate, meaning that there are substantial opportunities for companies that are able to adapt to these demands.

Miguel Angel Aguirre General Manager, Edelman Madrid

Views from the Continent – FRANCE “The vote of the British seriously puts Europe to the test” said President Hollande on Thursday morning after the vote in the UK. The future of EU is likely to become one of the key topics of the campaign for the Presidential election in May 2017 in France. This topic will be linked to nationalism and the protection of the French in an uncertain world. Marine Le Pen said that June 23 is “an historic day” for France and called for a referendum in France. She has just launched an online petition for a referendum on a “Frexit” in 2017. On a geopolitical perspective, Brexit put France in a difficult position: a “face to face” with Germany which, historically speaking, is always a source of stress and tension. Experts and public opinion feel the French Government and elite are too weak to face the German economic power and Angela Merkel. It is also seen as a victory for Russia and Vladimir Putin over European leaders and the US in his strategy to divides the West and get more political leverage. Impact on the French Economy Experts and the business community are also explaining Britain leaving would impact the current recovery of the French economy. The uncertainty for the next 2 years may have continuous effects on the

businesses. In the absence of free trade agreement with the UK, which would imply a return to tariffs by sector, Brexit could cost up to 3.2 billion euros of additional losses to France by 2019, or 0.5 % of total of the French exports. In an unfavorable exit scenario, the two countries could be cut by 5 billion euros of mutual investments. Some are saying that could be an opportunity to attract company HQs and banks to Paris (by creating a free tax zone in Paris). Implications for Trust Brexit presents a challenge and opportunity for the French business sector. The 2016 Edelman Trust barometer shows rising expectations that French businesses and CEOs will play important roles in addressing societal issues that political elites cannot. This is a new and unusual phenomenon for France, and business leaders should consider how their perspectives and voices can contribute to greater understanding of and engagement on the country’s most pressing challenges.

Stephane Harrouch Director, Public Affairs, Edelman France

Views from the Continent – IRELAND A Damaging fog of uncertainty” Irish Times. Many commentators describing this as the worst thing that could happen for Ireland at this point. General sense of shock and concern that has spread far wider than the political sphere. The initial reaction in Ireland was disbelief, with an emergency cabinet meeting called, setting the tone of respecting the decision followed by calls for calm as we work through the implications. The Government published what is being called ‘Plan B’. The challenge for Ireland is to remain an active EU participant, make the UK exit smooth and try maintain strong relationship with the UK. Balancing all of this in a climate where the EU will want to discourage other countries from following the UK’s path will be extremely difficult for Ireland. Ireland has 300 mile land border with Northern Ireland, which people cross seamlessly every day and there is real concern that this could be subject to some form of control. Uncertain too is the impact on the peace process and the Good Friday Agreement which was greatly facilitated by the common bond of the EU. Ireland had a general election in February with a Government only formed in May. This minority Government already faces huge difficulty in passing any contentious or unpopular legislation, and will find it increasingly difficult to pass the type of measures that will be needed in a negative economic situation. Impacts on the Irish Economy Britain is Ireland’s biggest export market. But there is no awareness of what type of tariff regime there will be and

how this will impact business. Ireland will want to keep a free travel area for people, goods and services between Ireland and the UK. The last few years have seen significant spend by UK people in Ireland, both in purchase of goods and services by Northern Irish people and tourism from Britain. This has led to strong recovery in Ireland, and particular bounce for border areas. Concern that this will now be reversed. If as expected there is a post Brexit UK recession this will have a devastating effect on Irish economy, more than wiping out any opportunity we have for increased spending, announced only last week in our Summer Economic statement, as part of pre-Budget process. The only positive is the possibility of attracting additional foreign direct investment but this is outweighed by the negatives. Implications for Trust The 2016 Edelman Trust Barometer showed Trust beginning to rise in Ireland among all institutions although it also evidenced a rise in inequality impacting the results. The last few years found Trust in Government linked to our economic outlook. 75% of those surveyed felt it was important for Ireland that the UK remains in the EU. Clearly there is a sense of alienation among EU citizens with how its institutions function and address their lives and concerns, a sentiment that is growing that people will want to see addressed in the response to the UK decision. Olwyn Enright Head of Public Affairs, Edelman Ireland

Views from the Continent – BELGIUM “The vote for Brexit is a slap on the face of the European project” stated Prime Minister Charles Michel. The Belgian Prime Minister called for the heads of state, heads of government and the President of the Council of the European Union to hold a meeting in July, without the British, to discuss reform of the European project. Charles Michel also indicated the need to turn this “difficult moment” into an opportunity – to reform the internal market, the energy market, the digital market, the monetary union and the internal and external security of the Union. In general all the Belgian parties regret the British vote. However they all agree that the Brexit is an opportunity to further develop and reform the European Union. On Friday, Kris Peeters, the Minister of Economy created a group of experts with the objective of analysing the impact of Brexit for Belgian companies. The taskforce is made up of experts from the three Regions and captains of industry. Belgium has always been pro EU and was one of its founder members. Since then, Belgium has always been fighting to keep the European institutions in Brussels, making the city the “centre” of Europe. Although the Flemish liberal Deputy Prime Minister Aleksander De Croo said there is no reason to panic because the UK was not part of Schengen or the monetary union. There is a general disappointment among most of the main political parties on the outcome of the British referendum. The exception is the Flemish right-wing separatist party N-VA (the most popular party by far in Flanders) that repeated that they were not supportive of the EU. All parties call for a reform or change of EU in its current form. The Flemish Christian Democrat Minister of Justice Koen Geens stated that “It is a choice for the past and not a choice for the future, which is too bad because Europe is part of our future”. Impacts on the Belgian Economy Kris Peeters takes the situation seriously because Belgium is the fourth largest exporting country to the UK. Therefore it is important to inform and calm

Belgian business. That was the reason for the establishment of an expert group. According to S&P, Belgium is part of the countries that will suffer the most from Brexit in relation to commercial exchanges and foreign investments for example – Belgium would be the first country (along with Switzerland) to be impacted. The former Governor of the National Bank of Belgium and now member of the Supervisory Board of the ECB, Luc Coene, has some interesting thoughts about the impact on the UK and the opportunity for Belgium. He truly thinks that some activities will leave UK. According to him it is more likely that London will not be able to keep its status as the financial centre of Europe. He added that Belgium should create a favourable context to host those institutions given its central position and its proximity to Frankfurt. The Trust connection Trust in the Belgian government decreased last year: 74% of the population think that Belgium does not have good leadership and 63% criticise the lack of economic growth. It is crucial that the government takes the necessary measures after Brexit to make sure businesses will not be impacted. In that respect, the initiative of Kris Peeters to set up a group of experts is a good start. In Belgium, the business sector is, by far, more trusted than government. People also think that business is the best placed to keep up with the changing times. Business plays an important role in Belgium, a land with a high concentration of SMEs and the presence of major global companies. However, the social climate is tense. 2016 has known a large number of strikes and demonstrations. The citizens are squeezed by unpopular measures. A lot of them also think Belgium pays a lot for the EU with almost no return for the common people. The government is expected to take the right actions to prevent a negative impact from Brexit, not only on business, but also on its citizens. Renaud Dechamps Director, Public Affairs, Edelman Brussels

What’s Next?

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Timeline across the continent

• Today, David Cameron will chair an emergency

Cabinet meeting to discuss immediate next steps.

• Today, John Kerry, the US Secretary of State,

will fly to Brussels to meet with the High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the Commission, Federica Mogherini. He will then fly to London for talks with the Foreign Secretary, Philip Hammond.

• Today, French President Francois Hollande will

hold talks with EU President Donald Tusk in Paris, before heading to Berlin for a meeting with German Chancellor Angela Merkel and Italian Prime Minister Matteo Renzi.

•T omorrow, David Cameron is due to explain the

UK’s position at a dinner at a two-day EU summit in Brussels. Cameron will leave after the dinner, taking no part in the talks between leaders of the bloc’s 27 remaining members on Wednesday.

•O n 1 July, the Netherlands hands over the EU’s

six-month rotating presidency to the relatively inexperienced Slovakia, which now must lead the negotiations towards Brexit. Britain had been due to take the helm at the end of 2017 but will now give that up.

•O n 4 July, Ireland’s Taoiseach, Enda Kenny, the

First Minister of Northern Ireland, Arlene Foster (Democratic Unionist Party voted Leave) and Deputy First Minister, Martin McGuinness (Sinn Fein voted Remain) will meet to discuss next steps.

Reaction from Across the Continent “Victory for freedom!” Marine Le Pen of France

“This is an unprecedented situation but we are united in our response. We now expect the United Kingdom government to give effect to this decision as soon as possible, as any delay would unnecessarily prolong uncertainty.”

Jean-Claude Juncker, President of the European Commission

“This set-back makes it only more important to make the necessary reforms in the European Union. We call on EU member states to send a strong signal reconfirming their commitment to the European Union and its three main economic pillars: the single market, the common trade policy and the euro.”

Emma Marcegaglia, President BUSINESSEUROPE

“Tough times call for even greater leadership and resolve, and for even more unity. Unity of purpose is our strength and our citizens – and the entire world – need a strong European Union like never before.” Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy

“After more than 40 years together, British citizens have decided to part ways with the European Union. It is a decision that saddens me, but at least it clarifies what has been a complex and at times ambiguous relationship.”

Martin Schultz, President of the European Parliament

“The EU needs to act decisively to ensure this is not the start of the break-up of the European Union, and does not damage jobs and workers’ rights.” Luca Visentini, General Secretary of the European Trade Union Confederation (ETUC)