- On 10 December Macron announced measures for low incomes in response to the protests in France.
- That same day Theresa May postponed the vote on the Brexit deal in Parliament.
- Prolonged uncertainty is managed with flexible plans, reviewing contracts, inventories, lead times and cash under more than one scenario.
On 10 December 2018, French President Emmanuel Macron announced measures aimed at low incomes in response to the protests, and that same day British Prime Minister Theresa May postponed the vote on the Brexit deal in Parliament. Two European governments, two decisions taken on the same day under the pressure of difficult political situations. Neither resolved the underlying problem, but both changed the scenario immediately.
The coincidence is accidental, but the lesson is a shared one: important political decisions can change pace, content or timetable quickly, and economic agents have to live with that fluidity. For a company with trading relationships in France and the United Kingdom, both pieces of news affected its immediate environment. Both called for continued attention and for a review of planning assumptions. When two neighbouring countries and trading partners go through tensions at the same time, the effect on supply chains and demand can add up.
Two governments under pressure
Two European governments were acting under pressure of a different kind: that of the street in France and that of Parliament in the United Kingdom. For companies with customers or suppliers in both countries, what mattered was that the timetable of each decision could move again.
Yielding to a protest or postponing a vote are different ways of gaining time and easing pressure. In the first case, an attempt is made to respond to a social demand; in the second, to avoid a parliamentary defeat. In both, the decision changes the timetable and the expectations of those affected. Watching how governments react under pressure helps to understand how much room there is for things to change course. It is worth remembering that concessions usually have a budgetary cost, and that cost ends up being reflected, one way or another, in the public accounts.
What the postponement means
Postponing a vote does not settle the substance of the matter: it prolongs the uncertainty over how and when the United Kingdom’s exit will happen. For companies with trading relationships there, a timetable that stretches also stretches the need to keep contingency plans.
Keeping contingency plans has a cost: management time, extra inventory, liquidity reserves and postponed decisions. The longer the uncertainty lasts, the more those costs weigh. For a small or medium-sized firm, with fewer resources to absorb them, it is especially important to calculate how long it can afford to wait before having to adopt definitive measures, and where the point lies beyond which waiting stops being reasonable. Setting that point in advance, in writing, prevents indecision from lasting longer than necessary.
Keeping plans open
When a political decision is put off, company plans should not be left in suspense. Reviewing contracts, inventories, lead times and cash needs under more than one scenario makes it possible to react quickly whatever the outcome, and avoids hasty decisions when the resolution finally arrives. Prior preparation turns an uncomfortable wait into an advantage.
A practical way of doing so is to set review dates. For example, to meet every month with the team and the adviser to update information, check whether any news changes the assumptions and decide whether any action is needed. That rhythm avoids both paralysis and overreaction. And it leaves a record of why certain decisions were taken or postponed, which is useful if they later have to be explained. Good documentation of decisions is also a way of learning from them.
Prolonged uncertainty is managed with flexible plans, not with waiting.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
