BERLIN: German firms active in Britain should make provisions now for a “very hard Brexit”, Germany’s biggest industry group said on Thursday, because the government in London does not know what it wants. The Federation of German Industries (BDI) said British Prime Minister Theresa May’s government lacked a clear strategy on how to exit the European Union following last year’s referendum.
“After four rounds of negotiations, German industry looks with concern at the progress of the Brexit negotiations,” BDI Managing Director Joachim Lang told reporters in Berlin. “The British government is lacking a clear concept despite talking a lot.” To prepare for a disruptive British departure from the EU, the BDI said it had set up a task force including major companies, which trains-to-turbines group Siemens (SIEGn.DE) said it was part of.
This week’s annual conference of May’s Conservatives showed her party remained deeply divided over Brexit and that a lack of strategy was complicating the negotiations with the EU about Britain’s divorce talks, Lang said.
“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.”
A hard Brexit would mean no agreement with the EU, and Britain falling back on World Trade Organisation rules rather than being in a tariff-free single market and customs union with the bloc. Britain is Germany’s third most important single export destination and its fifth biggest overall trading partner.
“The aim of the task force is to identify potential and acute risks arising from Britain’s departure and to present constructive proposals for solutions,” Lang said.
Sources told Reuters in September that big players such as Airbus (AIR.PA) and Deutsche Bank (DBKGn.DE) were participants.
