A no-deal Brexit with customs barriers, regulatory diversion and uncertainty around immigration could cost the German economy around 1% of GDP with the potential of 200,000 job losses, which could move the country into a recession in the fourth quarter of this year. Blick Rothenberg partner Alex Altmann also warned that: “A seven-year low manufacturing output is moving Germany as the largest European economy further into risk of a recession.”
Altmann, who is also a Co-Chairman of the British Chamber of Commerce in Germany, added: “The UK is Germany’s largest export market in Europe with over 20% of all exports going across the Channel. In addition, almost all exports to Ireland go via the UK as well.
“Angela Merkel said that she would fight to the last hour to prevent the UK crashing out of the EU without a deal. The new EU commission president Ursula von der Leyen hinted that the EU is open to give the UK more time and extend the Brexit deadline again. Germany’s manufacturers will be watching the next couple of weeks very closely in order to prepare for the worst”.
Altmann’s warning of the impact of a no-deal outcome on the German economy follows hard on the heels of a report from the Confederation of British Industry showing neither the UK nor the EU are ready in the event of a no-deal scenario.
Recommendations from the report, What comes next? The business analysis of no deal preparations, are based on a comprehensive study of existing plans laid out by the UK government, European Commission, member states and firms.
The analysis shows that neither side is ready for no deal on 31 October. report also highlights how – contrary to many claims – the EU lags behind the UK in seeking to prevent the worst effects of a no deal scenario. And although businesses have already spent billions on contingency planning for no deal, they remain hampered by unclear advice, timelines, cost and complexity. Larger companies, particularly those in regulated areas such as financial services, have well-thought through contingency plans in place, though smaller firms are less well prepared.