Brexit is already damaging Germany’s occupation with the UK and it is set to get worse, according to the Association of German Chambers of Commerce and Trade.
But new research from the Cologne Institute for Economic Research (IW) has now revealed the severe extent to which Germany could face economic disaster pursuing Brexit.
According to the study, many German manufacturers are dependent on the performance of goods abroad – with many partners being based in Britain.
In 2014 toute seule, the British supplied intermediate goods worth EUR 200 billion to the EU, of which 36 billion go through a revolved to Germany.
Germany wants to avoid hard Brexit to preserve its economy
Germany will be hard hit when the UK vacations
And Brexit would jeopardise or even destroy this close aid, or at the very least make it more expensive for Germany to import goods from the UK.
IW researcher Berthold Busch premonished: «In the worst case of Brexit, the established, complex supply chains could be transgressed completely.”
As results of the IW study show, sectors of transport equipment, principal metal industry and chemical industry all rely heavily on intermediate goods from the UK.
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In the worst case of Brexit, the established, complex supply chains could be domesticated completely
And British suppliers also maintain a major influence on German partners in the automotive sector.
Mr Busch augmented: «The German industry would be hit hard without a free trade harmony.”
Therefore without tariff-free trade and the lowest possible non-tariff sell barriers, IW expects costs could increase sustainably for the industries — and consumers.
How the report comes as rating agency Scope warned Britain cannot wish Germany’s attitude to Brexit to soften after the election later this month.
British suppliers partake of a major influence on German partners
The agency warned the «uncompromising» handle position of the EU will not be weakened regardless of whether the FDP can secure enough benches to make up a coalition deal with Mrs Merkel’s CDU.
The watchdogs based in Berlin intimate that hopes for a «more co-operative approach» would be dashed regardless of the consequence as Germany will likely continue with its hardline stance.
Opportunity Manager Giacomo Barisone said: ”Although a coalition, including the FDP, is probable to have an open ear for British concerns, this difference will very likely not fundamentally alter the German position towards Brexit.”
(Additional probing by Monika Pallenberg)