(Express) GERMANY has heaped blame on Brexit as the European Union’s largest economy hurtles towards a deep recession – industry bosses fear a no deal wipeout.
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The export-dependent economy is suffering from a Brexit shock as shipments to Britain dropped 21 percent quarter on quarter. And the possibility of a no-deal Brexit has leading industry figures cowering as they fear their businesses could be decimated. In the last three months to June, Germany witnessed the biggest slump in exports in over a decade since the financial crisis.
Global trade tensions between the United States and China and structural changes in the car industry were also blamed for the country’s misfortunes.
Brexit was branded a “pain in the neck” by Klaus Winkler, the chief of executive of Heller, who manufacture crankshafts that produce mill engine parts.The company is preparing to be hit with severe delays and higher trade tariffs if Britain leaves the EU without a deal.PROMOTED STORY
Mr Winkler told the Financial Times: “We can’t wait so long.
Angela Merkel’s Germany faces Brexit-fuelled recession (Image: GETTY)
“Our customers customers need reliable days for delivery – these machines cost a lot and are very expensive if they are not available.”
Heller products were delayed for about five days when extra checks were introduced at French ports in March, a taste of what is potentially to come.
He added: “Our biggest worry is the short-term impact.
“We will need far longer to deliver parts to our UK factory and even longer to get final products back to our end customers.”
Mr Winkler suggested that Heller may be forced to relocate its UK factory, which employs 165 people in Redditch.
“If we knew it would be a long-term border-check situation, we could move production from the UK to Nurtingen.
“This is not something we want to do, because we have built a very qualified workforce in the UK that is competitive compared to our German workforce.”
Angela Merkel timeline (Image: EXPRESS)
Andrew Kenningham, economist at Capital Economics, said: “Along with the threat of US tariffs on German autos, Brexit is a significant downside risk against an already very weak backdrop.”
Hadrien Camatte, a macroeconomist at think-tank BSI Economics, added: “German growth is hurt by the slowing of global demand and Brexit.”
Germany’s exports account for 47 percent of its Gross Domestic Product.
The figure dwarfs that of the French and British economies, which equates to just 30 percent, whereas the US GDP is made up of 12 percent exports.
The UK is the largest source of goods import and Germany’s fifth-largest export market after the US, China, France, and the Netherlands.
Holger Schmieding, chief economist at Berenberg in London, said: “German exports to the UK are already 12 per cent lower than they would have been if the trend that prevailed before the June 2016 Brexit vote had continued.”
He added: “Bad news on trade or Brexit would probably push Germany into a genuine mild recession.”