Italy: the possible opportunities of Brexit

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1990

Brexit is a fact surely significant and impactful for the European economy, however Frost & Sullivan highlights some opportunities that Brexit could generate for the Italian companies. “In Italy – explains Livio Vaninetti, Frost & Sullivan’s Director Italy – there is a wide consensus about the negative impact that Brexit will have on the British and European economy in the short and long term, but there is disagreement about the size and intensity of this impact. Italy is among the countries less vulnerable about the exit of the United Kingdom from the European Union, considering factors such as exports of goods and services to the UK (currently around 3% of the national GDP), the two-way flows of emigration, and the credits of the financial sector. However, it is natural to expect an impact on the Italian companies’ quotations in the stock exchange, as well as an impact on the spread in the short and medium term, due to the general instability of the markets because of the political consequences of Brexit, and the weakness due to the Italian government debt. We must also consider the potential risk of emulative effects from other states of the European Union”. According to Frost & Sullivan, the main opportunities that Brexit could create are the brexitfollowing: first of all, a partial delocalization of international companies from the UK to the European Union could occur in the coming years – in particular the productive activities that “use” the United Kingdom as the gate towards EU. This could result in interesting opportunities for the Italian companies. Another example are the digital platforms operating in e-commerce and e-economy which hardly can remain outside the European Union and continue to have access to the ECB guarantees. The presence of technological districts in Italy (rich of particularly innovative companies in their niche), possible governmental agreements for the de-taxation of the international companies that wish to transfer in Italy, as well as the quality of life in Italy, could be the winning cards in this process.
Besides, long-term effects of Brexit could be positive paradoxically, with a more cohesive Europe, oriented to ensure better prospects for growth and employment. Italy would have all the credentials to play a leading role in this new scenario. In addition, with a political competitor less in Europe, Italy would be able to reach more favorable agreements and conditions for the Italian companies in the European Union.
Finally, Italy’s role in exports and in the development plans of the EU peripheral countries could be even greater than before, especially in Eastern Europe. Brexit could lead to a revitalization of the relations with Russia and a further expansion of the Union in Eastern Europe. The impacts would be positive for Italy, especially in important sectors such as Made in Italy.
Frost & Sullivan indicates that, in order to gather these opportunities, it is important that companies act quickly, reviewing their strategic plans and carefully assessing direct and indirect impacts. The companies should also take into account what will change outside the EU, for example with the countries with which the UK has signed agreements through the EU: these agreements will haven’t value in the future.
For more information, please contact Anna Zanchi, Corporate Communications: anna.zanchi@frost.com