'Negative effects will occur': No-deal Brexit threatens German jobs

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'Negative effects will occur': No-deal Brexit threatens German jobs

A quarter of firms surveyed in Germany expect a no-deal Brexit will lead to job cuts, according to a new report.


That’s the picture emerging from the joint survey conducted by the Federation of German Industries (BDI) and the consultancy firm Deloitte, which asked more than 250 German firms a series of questions on how they are preparing ahead of March 29th, reported German daily FAZ on Thursday.

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According to the survey, a quarter of firms expect that if the UK leaves the EU without an agreement it place, it will lead to job losses in their workforce.

In the automotive and consumer goods industries, as well as in the banking sector, more than a third of companies expect that jobs will go. The UK is one of the most important export markets for cars manufactured in Germany.

"Negative effects will certainly occur. They cannot be prevented, even with the best preparation," said BDI Managing Director Joachim Lang.

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Damage expected

Almost half of the companies surveyed estimate the threat of damage from a no-deal exit to be high or very high. On the other hand, 41 percent said they expected a low amount of damage, 10 percent said very low and only two percent said “Brexit does not affect us”.

The researchers found that every second company has set up an emergency plan for a no-deal Brexit. For the study, a total of 262 major German companies with economic ties to the UK were surveyed last month on how they are preparing for the UK’s departure from the EU.

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Many of those surveyed are already experiencing the effects of Brexit, reports Spiegel. A total of 45 percent report that it’s more difficult to plan business with Britain, while 35 percent have postponed investments because of the uncertainty. Meanwhile, 30 percent are suffering from the fluctuations of the British pound since the referendum.

Despite all the uncertainty, general preparations for all outcomes  are well under way. For example, 60 percent of car manufacturers surveyed have already replaced British suppliers or service providers or are planning to do so shortly.

In the retail sector, 57 percent have increased their storage capacities or plan to do so soon. The aim is that they can remain able to deliver in any possible phase of uncertainty, says Alexander Börsch, Chief Economist at Deloitte told Spiegel. "Warehouses near ports are very difficult to find at the moment,” he added.

100,000 jobs could be hit

Thursday's survey came after a study published last month revealed a no-deal Brexit could cost more than 100,000 jobs in Germany.

The research, conducted by the Leibniz Institute for Economic Research Halle (IWH) and the Martin Luther University Halle-Wittenberg, looked at the effect of a hard Brexit on different parts of Germany, and showed the automobile and technology industries would bear the brunt.

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"In no other country is the effect on total employment as great as in Germany," one of the authors of the study, Oliver Holtemöller, had told the newspaper Welt am Sonntag.


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