New Survey

Not on Britain's Side

  • Why it matters

    Why it matters

    Britain is lobbying hard to secure concessions in upcoming Brexit talks. But a majority of German firms don’t want the E.U. to be too accommodating, even if it means they’ll lose money.

  • Facts

    Facts

    • The British economy is Germany’s second most important market in the European Union.
    • German exports to the United Kingdom last year were €86.1 billion ($96.01 billion), far more than German imports from Great Britain at €35.6 billion.
    • Only 26 percent of large German firms that do business in Britain want the country to retain extensive access to the single market if it’s allowed to block the free movement of people from the EU, according to a survey by Deloitte.
  • Audio

    Audio

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U.K. Prime Minister Theresa May Campaigns Ahead Of The General Election
Is Theresa May making promises she can't keep? Picture source: Bloomberg

Theresa May has said repeatedly in recent months that she doesn’t believe “E.U. leaders will seriously tell German exporters, French farmers, Spanish fishermen, that they want to make them poorer just to punish Britain and make a political point.”

She thinks export-dependent German companies in particular will exert pressure on Berlin to protect their close trade links. After all, Britain is Germany’s second most important market in the European Union. Germany had a huge trade surplus with Britain last year, with exports worth €86.1 billion, more than twice as high as imports from Britain at €35.6 billion.

But Jürgen Matthes, an economist at the Cologne Institute for Economic Research, said that from what he has seen and heard, German companies don’t want concessions to Britain to be so generous that they endanger cohesion within the EU. “Even if that means taking some losses,” he said.

A survey released this week by the corporate consulting firm Deloitte came up with similar results. Only 26 percent of large German firms that do business in Britain want the country to retain extensive access to the single market if it’s allowed to block the free movement of people from the EU, one of the EU’s four basic freedoms.

“German companies see their home market as Europe, which they have to protect,” said Alexander Börsch, chief economist of Deloitte Germany. “They don’t want to risk the EU breaking apart because other countries pull out after Britain. In light of this, the companies believe it’s better to accept short-term disadvantages.”

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