German Industries More Prepared for No-Deal than Predicted – Politics

Leading German automotive industrialists have cautioned they will not pressure Merkel into submitting to the UK’s agenda of staying in the single market in the event of a no-deal Brexit

It has often been argued by Brexiteers that the ‘they rely more on us then we rely on them’ nature of German exports, most prominently in the car industry, will result in a compromise before the UK ‘crashes out’ without an EU trade deal. This understanding is based on notions of industrialist angst in Germany over the absence of customs arrangements, free access to the EU Market and the gross projected delivery delays in which the ‘just-in-time’ manufacturing line relies upon consequential to a no-deal.

This is not to say a no-deal Brexit, or any Brexit will leave Germany unmarked. “German growth is hurt by the slowing of the global demand and Brexit,” told Hadrien Camette, BSI to the Financial Times as with the overall EU Economy. Exports decreased by 21 per cent in the three months leading up to June this year which contributed to a 0.1 per cent shrink in GDP within the same quarter.

However representatives within the German Auto Industry have implemented measures to remain markedly more buoyant in the case of a no-deal than UK Brexit negotiators would have hoped, with replacement sources for crucial areas along the automotive supply chain within the EU.

Furthermore BMW, VW and Daimler have already been shifting their focus towards the US and Chinese markets, with significant investment in new manufacturing plants benefitting from a similar rise in Chinese and American demand for German cars.

The legitimacy of Britain’s ‘No-deal threatening’ negotiating strategy has been made increasingly evident, both from the recent Yellowhammer Papers under Johnson’s Government, and the Former Brexit Secretary David Davis’ leaked letter to Theresa May in December 2017.

However, as with all projections of Britain’s relationship with the EU post-Brexit, the state of Anglo-European trade struggles to be accurately forecast given Brexit’s lack of precedence.

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