Germany’s biggest business lobby group has warned companies operating in the UK to prepare for a “very hard Brexit”.
The Federation of German Industries (BDI) accused Theresa May’s Government of being “at odds” with itself on a clear strategy for the looming divorce, claiming the outcome was “completely open”.
Its managing director, Joachim Lang, told reporters in Berlin: “After four rounds of negotiations, German industry looks with concern at the progress of the Brexit negotiations.
“The British Government is lacking a clear concept despite talking a lot.
“German companies with a presence in Britain and Northern Ireland must now make provisions for the serious case of a very hard exit. Anything else would be naive.”
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The BDI said it had created its own task force, split into 10 teams, to identify “potential and acute dangers” for future trade between the two countries.
The UK is currently a much bigger market for Germany in value terms – underlining its importance to Germany’s export-driven economic model.
According to central bank figures, Europe’s largest economy exported €116bn (£104bn) of goods and services to Britain in 2016.
The value of UK exports to Germany was €60bn (£54bn).
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The BDI’s warning resonates with frustrations expressed across the EU at the pace of progress in the UK’s exit talks – with the finger of blame being pointed squarely at these shores.
The chief EU negotiator, Michel Barnier, told the European Parliament on Tuesday that they had failed so far to achieve “sufficient progress” for EU leaders to authorise moving on to the post-2019 relationship.
Mr Lang’s remarks are aimed at piling on the pressure. German companies employ approximately 400,000 staff in the UK though the uncertainty has pushed top Wall St banks to expand their operations in Frankfurt.
It remains unclear whether they will be primarily new jobs or roles shifted from the City of London.
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While there has been Cabinet feuding on the Government’s strategy, the Prime Minister’s speech in Florence last month was well received by Brussels.
Mrs May’s most immediate problem is that her speech to the Conservative conference, in which she suffered several setbacks including suffering from a persistent cough, has raised speculation surrounding her leadership again.
That, in turn, can only stoke jitters over the outcome of the Brexit talks as the PM has signalled her support for a two-year transition period. Businesses – on both sides of the Channel – have demanded no cliff edge.