France urges businesses to prepare for no-deal Brexit

France has warned its business leaders to prepare for all potential Brexit scenarios including Britain crashing out of the EU with no deal, as Paris scrambles to plan for a new era of trade with its neighbour.

France urges businesses to prepare for no-deal Brexit
Photo: AFP
The meeting between junior finance minister Agnes Pannier-Runacher and members of trade federations comes after the French government unveiled draft legislation setting out preparations for a possible “no-deal” Brexit.
“It's about really explaining to them that they must prepare at the same time for the United Kingdom becoming a third-party country, and the risk of there being no transition period after March 2019,” a ministry source said of the meeting.
Any transition period to smooth Britain's exit “depends on an exit deal having been reached with the United Kingdom,” the source said — a deal that has eluded the EU and Britain so far, just months away from Britain's scheduled departure on March 29, 2019.
French companies are therefore being urged to prepare for “all options”, the source said.

Photo: AFP

Some 30,000 French companies export goods to Britain, according to the finance ministry. The exports were worth some 31 billion euros ($35.5 billion) in 2017.
“There are also all the companies which import goods from the United Kingdom and those that import services which are also affected,” the source said.
Credit insurer Euler Hermes estimated Tuesday that a no-deal Brexit could cost French exporters up to three billion euros next year.
Germany would however be the biggest EU country to lose out in trade terms, with its exporters losing some eight billion euros, followed by the Netherlands with four billion euros of losses.
Belgium, like France, would lose an estimated three billion euros under the credit insurer's model, which is based on import taxes of four to five percent being imposed as per default World Trade Organization rules.
It is also based on estimates that the pound would crash from its current value of 1.13 euros to 0.88 euros by the end of 2019.
The car manufacturing industry would be the worst affected by such a scenario, Euler Hermes predicted, followed by equipment manufacturing, electronics, aeronautics and drink production.
The draft bill unveiled by the French government this month lays out in broad terms the preparations needed for a potential no-deal Brexit.
It will cover what happens to French citizens living in Britain and vice versa, as well as customs plans to ensure the neighbours can continue to trade smoothly.
France has already begun recruiting extra customs agents to be deployed along the border after Britain leaves the EU.

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France may cut Channel islands ferry service after post-Brexit collapse in visitor numbers

Visits to the Channel islands from France have halved since Brexit, and French local authorities say they may be forced to cut the regular ferry service, asking for the passport requirement to be waived for French visitors.

France may cut Channel islands ferry service after post-Brexit collapse in visitor numbers

Travel to and from the Channel islands – which are British crown dependancies – has reduced significantly since Brexit, when passports became a requirement for those travelling in and out of the islands and their ports.

Now the president of the local authorities in the Manche département of France has asked that passport requirements be lifted, with hopes of increasing travel to and from the islands.

Jean Morin told Ouest France that there has been a “considerable reduction in the number of passengers on routes between the Channel ports and the islands” and as a result the ferry service between France and the islands was seriously in deficit.

“On these lines, we will never make money, but we cannot be in deficit”, explained the Morin. 

He added that if a solution is not found by the deadline of May 1st, 2023, then local authorities will stop funding the shipping company DNO, which runs the Manche Îles Express ferry service.

“If the passport requirement is not lifted by then, we will have no choice but not to renew the service contract for 2024-2025”, Morin told Ouest France.

Only around half of French people have a passport, since the ID card issued to all adults is sufficient to travel within the EU. 

READ MORE: Ask the Expert: How Brexit has changed the rules on pensions, investments and bank accounts for Brits in France

DNO re-launched operations in April and since then, the company, and by extension the département – who plays a large role in funding it via a public service delegation – has been losing significant funds.

According to Franceinfo, the number of passengers has been cut in half since passport requirements were introduced. Franceinfo estimates that for one ticket for one passenger costing €30, the département spends €200.

According to Morin, the ideal solution would be to require a simple ID for tourists seeking to take just day-long or weekend-long stays on the islands – which reportedly represents at least 90 percent of the boats’ usual passengers.

“The Jersey government is working hard on the issue and is waiting for an agreement from London and the European Union. There is the possibility that things could move quickly”, Morin told Franceinfo on Tuesday.

Prior to the Covid-19 pandemic and Brexit, boats going to and from the French mainland carried at least 110,000 people per year. In 2022, only 40,000 passengers made the journey, Olivier Normand, the sales manager of Manche Îles Express, told Actu France.

Normand had expected the decline, however. He told Actu France that the company had taken a survey, which found that almost half (between 40 and 50 percent) of their clientele did not have a passport.