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How current macroeconomic and geopolitical trends are impacting finance
A discussion on how two major incidents, Brexit and Covid-19, are reshaping trade policies and the CFO’s role in the global environment.
Related topics
The discussion references two major events - Brexit and Covid-19. Sally and Nicolas share their perspectives on the evolving role of CFOs pre- and post-pandemic, and ways industries are pushing themselves in new and innovative ways to cope with changes.
Corporations and government organizations have been incredibly adaptive to the lockdown conditions presented by the pandemic, effectively utilizing technology to shift from in-person to remote work. The challenges businesses are facing and how they’re shaping the role of CFOs and finance leaders in addressing those challenges cannot be understated.
Key takeaways:
- Technology is moving faster than governments and regulations can keep pace with. As disparate regulations emerge to protect consumers and their data, it has become increasing difficult for companies to meet all of the obligations, particularly businesses that operate cross-border.
- Plurilateral trade negotiations are coming together to create cutting-edge, trading commitments that will oblige companies operating within those countries to meet new and more ambitious sustainability standards.
- Trade disruptions, including ones experienced with Brexit or pandemic-related supply chain issues, can help companies pinpoint and modify business functions that operate in isolation.
For your convenience, full text transcript of this podcast is also available.
Myles Corson
Hello, and welcome to the Better Finance Podcast, a series that explores the changing dynamics of the business world and what it means to the finance leaders of today and tomorrow. I’m Myles Corson from EY, and I’m your host. I’m delighted today to be joined by Sally Jones, EY UK Trade Strategy and Brexit Leader, and Nicolas Veron, Senior Fellow at Bruegel in Brussels and Senior Fellow at Peterson Institute for International Economics in Washington, D.C., to talk about impacts of current macroeconomic and geopolitical trends. Sally and Nicolas, welcome.Sally Jones
Thank you, lovely to be here.Nicolas Veron
Thanks for having us.Corson
To get us started, perhaps you could share a little bit of your background in terms of your roles and your career journey to date for our listeners. Sally, maybe start with you.Jones
I am a trade strategist. That means that I help businesses and governments, and in fact investors, understand how disruptive trade can influence commerce. I’ve been doing that for well over a decade. And no one really cared when I started out, because when I started, trade disruptions weren’t that significant. But what we’ve seen is that from 2008 onwards, disruption has become more and more profound and more impactful for businesses, and Brexit is just the most immediate UK-based version of that.Corson
Well, it’s all about timing, as they say. Nicolas?Veron
I do public policy research, mostly into the area of financial regulation — as you mentioned, Bruegel in Brussels and the Peterson Institute in Washington, D.C. I’ve been doing that for more than a decade. My previous experience was both in government in France and in the private sector. I was CFO of a small-listed company in the early 2000s.My work is mostly about giving facts and ideas to the public policy debate and to public policymakers, so in a way expanding the range of options they might consider when they think about decision and reform. I work mostly on European issues in the last decade. European Banking Union has been a big topic. So has anti-money-laundering supervision in Europe, which is another active field, and obviously in that respect Brexit has been a major story in terms of changes in the policy framework, both in the EU and of course the UK.
Corson
That’s some fantastic experience to pull upon. There’s so much to think about in terms of trade policies and the economy. But I think it would be remiss not to start with looking back and the impact that the pandemic has had on trade and in areas like supply chain, for example. So perhaps you could share some overview on the challenges that you’ve seen businesses facing and perhaps some perspectives on how you’ve seen CFOs and the finance leaders playing a role in addressing those challenges. Sally, maybe I’ll come to you first.Jones
Oh, the pandemic. Everyone’s least favorite topic, I think. I think we’ve seen CFOs play a really important role. The first was in very quickly understanding that they had to be nimble and fleet of foot to keep supply moving in a way that frankly none of us have ever had to experience in the past. We’ve seen businesses having to completely recast their supply chains as borders shut, or ports specifically shut, and find alternative supply at unprecedented speed.I remember speaking to one of my clients, six or nine months ago, who was explaining to me that they make hand sanitizers and detergents, among other things. And their main active ingredient is denatured ethanol, which they used to acquire exclusively from the Asia-Pacific region. And then literally every Asia-Pac country shut its borders for a period of three or four months in spring 2020. And they had to find alternative sources, and they had to find alternative sources at zero notice. And they managed it. They managed to source product from Italy and from the Americas, which had the big impact of diversifying their supply base at a time when geographical diversity was critically important.
One of my concerns with the pandemic has been the push in a number of different governments for protections measures, including, effectively, what are purchasing localization requirements, making supply chains much less diverse geographically. And you see it in things like the Biden Administration’s “Buy America” initiatives. And actually, what the pandemic has shown us if anything is that supply chains are vulnerable, but so too are geographically non-diverse supply chains, when an entire region or an entire country shuts down.
I think the big challenge going forward is rising costs. The shipping industry has had an awful 18 months, not just the pandemic of course, but things like the Suez Canal crisis equally. We’re seeing that knocking through into containers being in the wrong place, ships being in the wrong place, and inevitably rising cost of shipping, which has gone up by about 500% compared to their pre-pandemic pricing.
Corson
There’s a lot to unpack there, and agility is clearly key. Nicolas, I would welcome your thoughts.Veron
Of course, every company is different. But I think a common theme is that CFOs have to think a lot in terms of risk management and risk assessment, and there has to be a lot of risk awareness in situations like the one we’ve been through. What I’ve observed the CFOs really playing, in some companies, not all, a leadership role in terms of thinking about scenarios, thinking the unthinkable, as the cliché has it, and leading adaptation of their organizations in that respect.I’ve been impressed frankly at how adaptive corporate organizations and also a number of government organizations for that matter, have been to the lockdown conditions. The speed at which people shifted from in-person to remote work has been in many places impressive, even though there have been hiccups. I think CFOs also have to think a lot about the human aspect of their work — issues of burnout, of people not coping. Family issues have been very prominent in the real life of companies, and I think this is not over. I think more than ever this is the time for CFOs not to be just the spreadsheet person but also to have this holistic approach to risk.
Corson
I think one of the other trends coming out of the pandemic has obviously been the reliance or dependence on connectivity and technology. Sally, perhaps you could share some perspectives on how you’ve seen businesses adapt in that area where there’s been success?Jones
I think Nicolas brilliantly picked up the way technology has been impactful for the workforce. I don’t plan to repeat that. But what I do want to pick up on is how well companies have effectively adapted to change with technological innovation. The phrase goes, “Necessity is the mother of invention,” and I think it’s really true here. So again, trying to give you a real-life example, but put some color into it.Borders shut, people couldn’t move, supply chains were disrupted. The pharmaceutical industry is looking really seriously now at things like 3D-printing of pills, medication, which has the huge advantage in that if each patient can print his or her own medication, then supply chains need to be far less complex. Because each patient has what he or she needs in their own house to print that pill. And that clearly has an advantage in and of itself.
But it actually goes even further, because now what the pharmaceutical companies are looking at is, can they in fact tailor each individual patient’s formulation of that pill to his or her own specific requirements and, therefore, make each pill more effective for that individual patient, recognizing different body mass, different hormonal systems and endocrine systems, other conflating and compounding factors to do with other symptoms or conditions that the patient might have.
So, you can see that something that wasn’t previously viable has suddenly become viable because of the pandemic. But the research could be really profound and long lasting. I think that’s again entirely to human credit that we can make these vast leaps forward in the face of adversity, perhaps because of adversity, when it comes to technology and innovation.
I think where things are really problematic, and will continue to be problematic for a while, is that technology is moving faster than governments and regulations can keep pace with. And we’re seeing emerge disparate regulations, many of which are trying to achieve the same thing, which is to protect consumers and their data and to keep it private and secure, but because they achieve it in different ways, it becomes almost impossible for any one company to meet all of their obligations particularly international businesses that operate cross-border.
We’ve seen examples where companies have come to us and said, “We are required by law to host all of our emails on servers located in Country A and only Country A. We are also required by law to host all of our emails on servers located in, and only located in, Country B. We can’t meet both obligations. What the heck do we do in order to make sure that we are not inadvertently breaching regulations, but all we really want to do is just be able to do our business and send our emails cross-border without restrictions, and unnecessarily burdensome restrictions.
And those are real challenges, and I think those challenges will only increase in the coming years before some form of international consensus on the regulation of technology and digital trade emerges. The faster that happens, the better. In my example of two separate countries with two different sets of regulations, oftentimes the regulators are willing to take much more pragmatic positions than the legislation strictly allows. But it doesn’t feel entirely satisfactory that people are requiring regulatory cooperation to achieve a sensible answer rather than legislative reliance.
Corson
Sally, you’ve highlighted some great examples of the supply chain challenges, both from the sort of globally integrated supply chain considerations as well as sort of the hyper-local example that you gave with the 3D-printing of pills. And if you kind of lay on top of that some of the environmental and sustainability challenges, the issues around carbon footprint, global supply chains, how do you see that shaping up? You highlighted some of these challenges about global regulatory environments. Now I’m sure it’s not going to be one thing or the other, but how do you see the trade-off between the globally integrated and the localized playing out?Jones
I suspect, getting my crystal ball out, that sustainability and environmental concerns are going to push towards localization. Whereas efficiency will often move you to looking, and diversity will often look to, something on a more global basis. The tension between the two will have to be resolved. Again, I suspect that each business will find that that tension exists in a different place, and therefore, the solution it needs to maximize its trade will be in a different place for each business.If we use the pharmaceutical pill-printing example, 3D printers require input. They don’t just print from thin air, although maybe one day they will. Maybe one day we will be able to extract atoms from the air and use those for 3D printing. But nevertheless, you need inputs. And one can imagine a situation where the inputs that go into the printer, the raw ingredients that go into those printers, those are sourced globally to ensure that every patient is able to access those when he or she needs them.
But the printing can happen locally, as you say hyper-locally, in each person’s house. That seems to me to be the kind of way where we’ll see the two come together into a mechanism that in that pharmaceutical example gives rise to a better outcome than existed when pills are printed in mass factories in individual countries.
My sense again, across all of those, is that where there are global requirements, as for raw materials for 3D printing, those will be subject to increasingly stringent requirements to ensure that they’re sustainable, which we already see in key sectors, as with Kimberley requirements for diamonds and elsewhere, that kind of obligation to make sure things are ethically and sustainably sourced, is where the sustainability angle will come in. Once that has been certified, bringing it local is the way forward.
Corson
Picking up on the thing of sustainability, that’s been one driver, I think, of changing needs and expectations of stakeholders, including investors. To your point earlier, organizations have had to shift and be agile in responding to all of these changes. Sally, can you maybe share some perspectives on how boards, including CFOs and CEOs, have addressed some of those challenges? And how they’re continuing to respond as those needs evolve?Jones
One of the things that I think is most commonly encountered when a company faces trade disruption — I’m going to use Brexit as an illustrative example, just because that’s immediate and recent. But one of the things that our clients encountered with Brexit was an increased realization of how siloed their business functions have been in the past.So, one of my clients, a logistics company, was actually pretty relaxed about the border changes that Brexit would bring, because they said rightly, “We bring parcels across borders in 200 different countries, and therefore, we deal with 150 different border systems. There is nothing that Brexit can throw at us that we haven’t dealt with somewhere else. And once we know the shape that that border formality between the UK and the EU is going to take, we’ll just import from elsewhere the technology that we need to put it in place.”
And that made perfect sense from a commercial and a customs and tariff perspective. But then they got talking to the IT people who would actually have to make that real. And the IT people said, “Well, hang on a minute, we’ve just acquired a business. We’ve been told that all of our resources for the next 24 months has to be spent on integrating their external website and our external website so it becomes a seamless thing. We don’t have the resource to make the changes that you want us to make, particularly not at short notice.”
And so, it wasn’t until the IT people got talking to the commercial people that they realized there was a genuine problem with the plan that they put in place. Then they started talking to the HR team about whether they could recruit more people. Well, no, they couldn’t because there was a recruitment freeze, and they didn’t have the internal training that was necessary. But those IT people had never spoken to the HR people at all, didn’t know each other in the slightest. So, we had to bring them together. But then somebody sensibly said, “Well, inevitably when you bring two businesses together, there’s redundancy. Why don’t we take some of the people that would otherwise be made redundant and train them up in the necessary skills while we’ve got the time to build capacity?”
So, all of a sudden you had HR, training, customs and borders, IT and commercial, all talking together to find a solution in a way that they simply never had to do before. And that communication, that breaking down of silos, because trade issues are full business across the spectrum issues, is a real feature that we see coming together in these kinds of challenges.
Corson
That’s a fantastic example. I think it talks to a broader trend than we’ve seen and finding a role that CFOs can play at the center of some of those conversations, bringing together different parts, different functions within the organization, to be able to respond to these disruptions and challenges.Jones
Yeah. Totally. And just giving people the permission to speak together, recognizing that there’s a cost implication with that often. The CFO giving people permission to do that, to come together, to convene, is really important.Corson
We’ll come back to some of the Brexit challenges momentarily. But again, in taking a step back in terms of some of the broader issues on the global economic recovery and the level of confidence that you're seeing across the investor community, the boards and the C-suite, perhaps you can share some perspectives.Veron
I think at this point we’re in the cycle of recovery. The vaccine sequence has been nothing short of miraculous, frankly, in advanced economies, of course. The situation of the pandemic is much less positive in a number of countries and I think there is an obvious imperative to really show enlightened self-interest and devote significant financial resources to providing vaccines much quicker than even what the G7 has announced to the rest of the world. It is their duty right now.But in terms of the economic cycle in advanced economies, the latest news has been almost uniformly positive, thanks largely to those vaccines, thanks to the reduction of political risk, if I can put it that way. And to a reasonably well-managed transition also at the multilateral level. If I look at risks to that relatively benign scenario of continued recovery right now, I think in the really big picture there are risks, of course, of the new pandemic or a new variant of concern that would be vaccine resistant. Fortunately, this has not materialized so far, but this remains an elevated possibility, and I think we cannot consider even the advanced economies to be out of the woods yet by a significant margin.
If I look ahead a bit, broader, I think there are political risks that could threaten the cycle of recovery but none of them is probably very immediate. Particularly, of course, from a global perspective with the US and China as a risk of political polarization in the US and whether the US institutions can cope in the next few years, I think is very real.
And as far China, there are a lot of moving threads there, both inside China with their approach to their internal issues in Shenzhen and some are internal issues — they view them as internal, the rest of the world views them as external — with Taiwan. And there’s a possibility of escalation between the US and China. So, nothing to be complacent about. But I think at this point there is a pretty solid scenario of continued recovery at least in the short term in the parts of the world, which explains the bullishness of the markets and what we’re seeing in terms of also monetary policy. But even the turbulence associated with uncertainty about rate increases and all that, ultimately, is linked to those good news.
Corson
That was one thing I was going to ask. I mean, what’s your perspective on the potential threat of inflationary pressure?Veron
There’s a lot of debate about this among economists and, frankly, even just my colleagues at the Peterson Institute and also at Bruegel would be more qualified than I am to comment on that. But just to say, I think the major central banks, and especially the Federal Reserve and also the ECB, are not at this point viewing inflationary pressures as something permanent.So, there are strong inflationary pressures, but the question is how continued they will be, once a number of adjustments to short-term sparsity are made over the next few months. And I think here the broad consensus view among central bankers remains that this is a temporary phase of adjustment in the exit from the lockdown and a number of transitions that are happening in the global economy and domestically in a number of jurisdictions. But this is not to be viewed as the start of a major inflationary cycle that should be addressed as such by monetary policy.
Now, of course, this is an unprecedented experience for everybody involved. We never had a shock exactly like the one we’ve been through, and therefore, there would be a lot of learning from the data and adjustment of policies there too, but I think what I just described as a consensus is what drives policy and markets are adjusting.
Corson
Sally, you raised the example of Brexit a few moments ago, and as we sit here in 2021, months since the UK-EU relationship agreement took effect, and obviously there continue to be some challenges, both practically and from a policy perspective. Perhaps you can share your perspectives on where we stand?Jones
Yeah, let’s talk about Brexit. Let’s recap a little bit of what happened. Because it is confusing for the people who haven’t lived and breathed it, as my team did. So, the first thing to remember about Brexit is it was a game of two halves. We had the negotiations for the withdrawal, which is a bit like a divorce, and then we had the negotiations for the trade deal and other ongoing matters, which is really about who gets the kids, ongoing relationship part.The withdrawal agreement negotiations gave rise to the divorce terms, most of which have fallen away, the major exception being the Northern Ireland protocol, which continues to exist and will exist until the people of Northern Ireland decide it’s no longer needed. What the Northern Ireland protocol does is in effect it puts Northern Ireland in an absolutely unique position in that for many practical purposes it is in both the union of the United Kingdom and it’s in the single market and customs union for goods, which is either, depending on whether you're a glass half full or glass half empty person, it’s either a very preferential position, because of preferential access to both markets, or it’s an awful administrative burden that makes doing business much more complicated.
I don’t think consensus has yet emerged among Northern Irish businesses as to which of those two opinions will prevail. I really hope it’s the glass half full preferential position that does emerge as the consensus, because that would be great for the people of Northern Ireland. So that was the withdrawal agreement. Then you had the future relationship that’s now governed by the Trade and Cooperation Agreement. It was announced as a done deal on the 24th of December.
I spent most of Christmas Eve not making mince pies with my children, as I’d intended, but in fact hunting and pressing at F5 on my computer to see if the deal itself would be published. It actually wasn’t published until Boxing Day, the 26th of December; and then went live on the 31st of December, which gave businesses six days — three working — days to absorb all of its terms, many of which had not previously been flagged and, therefore, were new for businesses to react to.
That inevitably has created an element of disruption. People who are familiar with trade matters will say to you things like, “Oh, it’s always the case that trade deals are agreed at the last minute.” And that is true. But of course, the reality is that every other trade deal in human history effectively has been about reducing trade barriers, and therefore, it didn’t matter if businesses weren’t able to respond to them quickly, because it merely meant that they were meeting higher barriers than they were legally obliged to meet. Whereas this deal is different in that it’s raised trade barriers compared to the situation of being in the single market, and therefore, companies trade unlawfully if they didn’t absorb and meet obligations straight away. So, it was a real challenge.
Our clients have experienced waves of Brexit. So, wave one was January and February, and it was deeply operational and granular. It was calls around “how do I complete this box on my new customs form? How do I get vet health certificate? Who do I need to sign this piece of paperwork at the border?” Very, very operational, very granular. Teething problems in effect. Then in March and April we saw the conversation move on a little bit, and it became more about the structural problems that are inherent now where companies are having to make a decision about what they’re going to do.
So, if, for example, your UK distribution center doesn’t meet the requirements for goods that it transfers into the EU to have zero tariffs, such that there is a new tariff burden on your UK-to-EU transactions, you might choose to no longer use the UK distribution center for goods that are destined for the EU market. And so, we’re seeing companies bite the bullet on those kind of structural changes now.
The point that hasn’t yet really bitten, but will, is around mobility and people movements. And the reason it hasn’t bitten so far is because COVID travel restrictions have massively reduced business travel. But what we see now is that when a company wishes to send somebody overseas on business travel, it has to now ask itself two extra questions that it didn’t have to ask before.
The first question is, can I get my person across the border without a visa? And the answer to that is oftentimes yes, but oftentimes no. The rules in the Trade and Cooperation Agreement say that somebody can move from the UK to the EU for up to 90 days in any rolling 180-day period without a visa, providing they’re in country for visits. And we’re already seeing situations where people are getting close to that 90-day limit.
But also, the definition of “visit” is quite strict. So, for business purposes it’s often not the thing that you want your person to do, but it’s an ancillary thing that’s attending training courses or purchasing materials, but it’s not doing their day job. And so often, even if the 90-day limit isn’t up for close scrutiny, what that person is doing will be. So, it’s much harder now to move a person from the UK to the EU or vice versa without a visa.
The second question is actually even harder to answer, which is, once the person is in-country, do they need a work permit? And the reason that’s harder to answer is because that’s not a TCA, a Trade and Cooperation Agreement, question. That depends on the immigration system of each of the countries that you want your person to be in. And again, oftentimes a work permit is needed urgently, and that will become much harder for businesses to tackle once they’ve got material volumes of people moving cross-border and they’re dealing with a number of different, potentially up to 31 different, immigration systems of the 27 EU states, and then the four, the members as well.
Corson
There’s a lot to unpack there. Nicolas, any reactions there in terms of the impact on businesses post-Brexit trade?Veron
I think the point that Sally made about mobility of people is central, and in a way, COVID-19 has prevented one of the big headaches from Brexit to emerge in real time, at the point of separation on January 1st. We will never know what kind of chaos we would have experienced with all these people issues had Brexit happened in normal conditions and not under lockdown and COVID-19 mitigation conditions. And the silver lining of that is that companies and businesses, and also individuals have, in practice, had more time to prepare for all these difficulties with mobility in the new post-Brexit situation.One thing, of course, I’ve paid a lot of attention to, being a financial services person, is availability of financial services to businesses during that transition. And here is also a silver lining of something which was not necessarily a good thing, which was the fact that the Brexit negotiation had so many hiccups and delays and certain deadlines that were then shifted, and that gave businesses a lot of extra time.
Remember Article 50, Treaty of the European Union Procedure, has been intended to have a two-year transition, and David Cameron said before the referendum in 2016 that he would trigger it immediately after the referendum. Actually, there was a delay in triggering Article 50 and then multiple delays in dealing with the Article 50 deadlines and follow-up, which means that instead of two years it was much more — four and a half between the referendum result and the point of separation from the single market and customs union, which is the ones that really matter for business, as opposed to formal exit from the European Union on the first of January 2021.
In financial services, maybe even more than in other areas, that period was used productively, not perfectly but productively, to make sure that there would be a seamless transition. That there would be no instability, no turmoil, no unexpected glitches as a point of departure. And by and large this was handled very professionally by the financial sector.
I think the financial sector as a whole, including firms and also regulators at the technical level, deserve a lot of credit for the fact that there was no glitch worth mentioning on January 1st. There were significant shifts of liquidity, and there’s been a lot of comment on the fact that share trading has moved from the UK to a number of continental European financial centers, primarily Amsterdam, in very big numbers. But that was very smooth, very free of short-term disruption. Basically, what I’m saying is that this is a dog that hasn’t barked, thanks to delays, but also to very professional preparation. And I think this has to be celebrated in a way.
Corson
I think we’ve covered the services and sort of the broader commercial impacts of Brexit. Anything either of you wanted to say before we wrap up that conversation on Brexit?Jones
It is worth touching on trading goods briefly. Because the inevitable new frictions associated, no longer being in the single market for goods, means that our trade with EU countries has decreased markedly, and you can tell that that’s because of Brexit rather than COVID, because when we compare it with our trade with non-EU countries the decrease is much less.The Office of National Statistics has compared quarter one, 2021, with quarter one of 2018, and discovered that EU trade is down 20–25% compared to trade with the rest of the world. In fact, something for the CFOs to be particularly aware of, is that China is now our biggest import partner and has been now for over a year. It used to be the EU. We now import more goods from China than from any other country. That’s both an opportunity and a threat, inevitably. And how much you care about that depends on who you think is the better trading partner, the EU or China. But that geographical change, because of Brexit, is something that CFOs do need to be aware of.
Corson
It’s very interesting to see that’s already coming through in the statistics, so thanks for sharing that, Sally. We did touch on sustainability a little bit in terms of the supply chain considerations, but as a major theme and topic, I just want to revisit it, particularly in terms of potential impact on the global economy over the next few years, and how sustainability drivers can create challenge and opportunity for businesses. Sally, anything you’d add on how you see sustainability impacting business performance and how that’s going to shape trade policy?Jones
I think it’s actually the other way around. Trade is taking something of a lead on sustainability. So, we see it in, for example, plurilateral trade negotiations, which are being led by the unlikely combination of New Zealand, Norway and Costa Rica, coming together to create cutting-edge, new trading commitments that, when countries sign up to, will oblige the companies operating within those countries to meet new and much more ambitious standards than would otherwise be the case.I think that there’s just this sort of stick and carrot. The carrot is that companies that do sustainability well will have an advantage over their competitors, because they will be seen by consumers as companies whose products and services they want to buy. But equally, that’s the carrot, but the stick element of it is that they will face increasing regulation, increasing disclosure and new obligations, and those will be based into legislation, either international legislation or domestic legislation, and enforced. So, trade is going to be an absolutely critical lever to effect behavioral change both for corporates and for consumers.
Corson
We’ve covered a lot of ground today, and just in wrapping up, I’d really welcome any final thoughts or recommendations you have for listeners as they continue to prepare and adapt to the disruptions from global, geopolitical and macroeconomic disruptions. Nicolas, let’s start with you.Veron
Brexit has been our common theme to a large extent in this session. So here, taking a step back, I would go back to the divorce metaphor, which unfortunately does apply in many ways to this situation. We all know of divorce situations where the problem is that both partners find it very difficult to project themselves into a positive divorce condition and still think in terms of the former relationship, not the new one. I think we see a lot of that in both the EU and the UK.A number of people both in the political sphere, but also in some aspects in business relationship, finding it difficult to just let go of the relationship as it had been, and to accept that the new relationship is fundamentally different. And that can create a lot of friction, anger and blaming the other side for the fact that the old relationship is over, even though that’s now a fact of life. I think the sooner everybody gets out of that mentality, the better. But it’s easier said than done. And I think this is the biggest challenge collectively, both as I said, on the UK side and on the EU side.
Corson
Sally, last thoughts from you?Jones
Trade disruption is going to continue. Whether it’s geopolitical disruption, as with Brexit, or the US/China trade, or the impact that technology is going to have on the way we trade going forward, or the new requirements that will come to us from environmental and sustainable requirements. Trade is going to be disrupted, and it will continue to be disrupted increasingly for the next 10 to 20 years. Build capability — build capacity to handle those trade disruptions so that when the next Brexit comes along you are ready to deal with it.Corson
We’ve covered a lot of ground. It’s been a fascinating conversation, which I’ve really enjoyed. So, thank you both so much for joining me today.Veron
Thanks to you again.Jones
It’s been a pleasure, thank you.Corson
And of course, thank you to our listeners as always for listening. And if you’ve enjoyed the episode, please remember to subscribe to the series, or leave a rating or review. And if you’d like to find out more about any of the topics, we’ll post related links at ey.com/betterfinance. And I’m sure you can find both Sally and Nicolas on social media. I look forward to speaking with you on the next episode of the Better Finance Podcast, a series that explores the changing dynamics of the business world and what it means for the finance leaders of today and tomorrow.(END OF TAPE)