One in ten German firms to cut UK investments before Brexit: survey

AFP - [email protected] • 28 Mar, 2017 Updated Tue 28 Mar 2017 14:30 CEST
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One in ten German firms present in Britain plans to stop investing in the island nation even before it definitively leaves the European Union, an industry group survey published on Tuesday found.


German firms believe Brexit "will seriously damage business with the United Kingdom," said Eric Schweitzer, president of the Association of German Chambers of Commerce and Industry (DIHK), which surveyed 2,200 internationally active companies.

Some nine percent of firms who have invested in the UK plan to shift investments elsewhere, with Germany and the rest of the EU the top choices.

Britain is the third-biggest export market for Germany after the United States and France, buying some €86 billion of goods in 2016.

The DIHK estimates some 750,000 German jobs are dependent on exports to Britain.

Meanwhile, 2,500 German firms active in the UK have created some 400,000 jobs, compared with around 220,000 people in Germany employed by 1,200 British firms.

Nothing will formally change about economic relations between Britain and the 27 remaining EU countries until the end of two-year exit talks - expected to be launched on Wednesday by Prime Minister Theresa May.

But while companies have a slightly positive view of present business between the UK and Germany, some 40 percent expect trade to get worse in the coming months.

German exports to Britain fell by 3.5 percent last year compared with 2015, with a particularly strong decrease in the six months after the June referendum on quitting the EU.

Smaller firms with revenues of between €10 million and €50 million per year and those who import goods from Britain are most pessimistic, with the latter group fearing disruption to their supply chains and increased customs bureaucracy at borders.

Looking ahead to the talks between London and Brussels, almost nine out of ten firms surveyed hope that free movement of goods between Britain and the EU will be upheld once Britain is out of the bloc's single market.

The next fondest hope of German firms was for no increase in bureaucracy, at 83 percent, while 67 percent will look for free movement of capital to be maintained.

Around half of firms would prefer free movement of people between the EU and UK to continue after Brexit.

"There should be as few limitations to movement of goods and as little additional bureaucracy as possible," DIHK chief Schweitzer said.

But "too many concessions by the EU in the negotiations must not endanger the single market," he went on - alluding to fears that allowing Britain to "cherry-pick" benefits of membership in the economic bloc could undermine its members' unity.

"That would be an even bigger problem for our companies set up abroad," he added.



AFP 2017/03/28 14:30

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