One of Germany’s leading business research groups has warned that a ‘no-deal’ Brexit could result in a 57 per cent fall in German exports, affecting some of the nation’s key industries.
The comments, which come from Cologne’s IW Economic Institute, come at a time when fears of a ‘disorderly Brexit’ are mounting ahead of a crunch European Union (EU) leaders’ summit due to take place on Wednesday 17 October.
The IW Economic Institute, which is one of Germany’s most powerful BDI industrial lobbies, is predominantly concerned about tariffs and customs barriers affecting trade and has warned that a no-deal scenario would be a ‘nightmare’ for both Germany and for Britain.
It said that sectors ranging from car manufacturing, logistics, pharmaceuticals, aerospace and more would all face a “massive crisis” in the short-term if the talks on 17 October proved to be unfruitful.
“The next EU summit must bring a breakthrough in the talks. Otherwise, Europe is in danger of sliding into a disorderly Brexit” said BDI Managing Director, Joachim Lang.
Meanwhile, Markus Jung, of the IW, described a no-deal Brexit as a “horror scenario” and said that policymakers needed to urgently take “constructive action.”
The group said that a Brexit transition period from now until 2020 was vital for German businesses and that any new or unusual customs arrangement would be “a negative deviation from the status quo.”
The news comes at a time when research cited in The Guardian this week suggests that confidence is also waning here in the UK, as uncertainty over negotiations continues to grow.
According to reports, British businesses are today the most anxious they have ever been about Brexit since the referendum, with only 13 per cent feeling positive about their growth prospects, down from 24 per cent in July.
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg & Co Limited. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please contact us.