German Firms Bear The Heat Of Brexit, Causing Setbacks
Gabriel Felbermayr, the director of IFO Institute for Economic Research at Munich, says that Britain’s exit from the EU is to German businesses, as a result of the uncertainty hanging fire over the exit. One way to stop the trend was for Germany to offer concessions to the UK. A joint customs space should be in place for the EU and the UK to operate even after the Brexit, he says.
In an interview to Today Program of the BBC Radio 4, Felbermayr cites the 10% fall in German exports since mid-2016 as a reason for the measure to be effected.
Short-term effects will be sharply negative but in the long run too, the German GDP might see a lowering up to 0.5% and that would be bad. The uncertainty arising out of this perception is affecting the German business, he says.
The ongoing uncertainty which started about two years ago is a bigger concern and needs solution rather than the possibility of controls and tariffs being imposed at the borders.
The EU should consider taking a softer stance though the German businesses would want to avoid the undermining of EU’s negotiating powers.
He said that at least a stop-gap arrangement is to be found to withdraw the limit for the movement of goods and capital. A provisional agreement that envisages a joint customs territory between the UK and the EU even after 2020 should be signed. There should be no difference between how the UK and Northern Ireland are treated. A hard Brexit could hurt all concerned is known to everybody, so that the big businesses are urging the EU to consider concessions. Felbermayr made these remarks in the face of the UK firms berated the government for leaving them in the lurch.
The UK is scheduled to leave the EU on 29 March, but 20 questions as listed by the British Chamber of Commerce (BCC) still remain unresolved.