PARIS — French firms are preparing for a possible "catastrophic" breakdown in Brexit talks and Britain's disorderly departure from the European Union, said the head of France's largest business lobby.

"We are looking at the worst scenarios," said Pierre Gattaz, whose MEDEF lobby represents some 750,000 firms.

While Gattaz said he hopes Brexit talks would wrap up quickly, he is advising French firms on both sides of the English Channel to prepare for "all scenarios, including one where negotiations drag on and end without any deal, with all the judicial uncertainty and political problems that this would imply."

Speaking to POLITICO, he said: "We have to consider the catastrophic scenario."

The French economy is heavily exposed to Britain, with some 3,000 French firms employing nearly 400,000 people across the Channel, according to the Franco-British Chamber of Commerce. Some 60,000 French people work in London's financial sector, for a total French expat population estimated at around 300,000 people, according to the Ministry of Foreign Affairs.

If Brexit talks collapse and Britain withdraws from the EU without a negotiated deal — a prospect that negotiator David Davis has qualified as remote, but still possible — all those employers will be cast into limbo as to the status of their trading licenses in the U.K. and the work contracts of their employees.

Meanwhile, hundreds of thousands of French and British expats living on either side of the Channel would face immediate questions about their immigration status and possible expulsion orders.

Such uncertainty is "bad for business" and subjects firms to "instability" — to the point that Gattaz said he hopes Britain would "return to the EU."

As long as Britain is on the way out, however, he said France should be firm on the terms of the U.K.'s exit — in particular on its financial obligations. "We separate the judicial and political aspects from our commercial relationship, which must continue. But you cannot leave an apartment and decide not to pay the rent," he said.

"All parties need to respect the terms of the contract."

In other words, France's biggest business lobby will not press the government to open channels for informal talks with Britain and won't urge the EU to go soft on U.K. requests for cherry-picking in its new relationship with the bloc. According to Gattaz, it is fully focused on limiting damage and priming firms for the next big challenge: beating rivals — Germany in particular — in the race to win the jobs and investment leaving Britain.

"[Brexit] creates opportunities ... It's competition and we approach it with a sporting mentality," he said, adding, "Que le meilleur gagne," or "may the best win."

Thumbs up for Macron — mostly

Gattaz, who has been on the job since 2013, was full of praise for President Emmanuel Macron, who he said had inspired "fresh confidence" in the French economy by doing the "hardest things" right at the beginning of his term in power — notably an overhaul of France's famously protective labor code.

Changes to the labor rules, which are currently being enacted via executive decree, would give firms much more flexibility to adapt to market conditions while giving them crucial visibility on their liabilities in the event that they have to part with workers.

With overhauls of a deeply indebted jobless benefit scheme and a dysfunctional job training system planned for the next few months, France would, within two or three years, be reborn as a "European motor, a world player and a key driver of European construction," said Gattaz.

One particularly urgent matter is overhauling the jobless benefits system, whose debt is projected to hit €37.1 billion next year, he added.

The current system, co-managed by unions and employers, is open to rampant abuse by job seekers with "some young people taking advantage of the system to work for six months, then stop for six months," he said. "That's why I suggested having tighter controls for job seekers."

Reforming the job-training system is another massive, and crucial, issue for the government to tackle, according to Gattaz. MEDEF recently estimated that 200,000-300,000 jobs were vacant in France due to a combination of insufficient training, limited mobility on the part of job seekers and weak incentives to return to work.

In reality, said Gattaz citing anecdotal evidence and interviews with CEOs, the number of vacant posts was probably higher — between 350,000-500,000.

"That's why we need a much more efficient training system, to make sure people have the skills appropriate to fill those posts," he said.

Amid the praise, however, Gattaz did find one reason to criticize Macron: his supposed lack of appetite for cuts to public spending.

"On public spending, the government is not ambitious enough," he said. "We suggested lowering spending by €100 billion, or in other words, not increasing the public outlay for a few years. The government chose to be less ambitious."