Germany would rather see their own carmakers suffer than offer the UK a good Brexit deal, an economist has claimed.
Ruth Lea, an Economic Adviser at Arbuthnot Banking Group, said Germany “have a lot to lose” if Brexit negotiations fall through with the Brussels bloc.
This week the Prime Minister confirmed the UK was preparing for a “no deal” scenario with the EU if talks fail.
Speaking exclusively to Express.co.uk, Ms Lea warned German manufacturers about the risks of “no deal”.
“I have always thought that actually, Germany has got quite a lot to lose if there isn’t a trade deal,” she said. “They do have an absolutely ginormous trade surplus with us.
Economist Ruth Lea warned Angela Merkel about the impacts of Brexit to German industries
“Actually the EU has a trade surplus of visible trade of about £80billion to £90billion which is enormous.
“Germany’s trade surplus with the UK is £2.5billion to £3billion a month. That’s enormous. How many German jobs are involved in that?
“The problem is for German industry is that the German politicians play the game that we are actually more concerned about the European political project than they are about their manufacturers.
“At least that is what they say up front. What they say behind closed doors, you and I will never know.
“At the end of the day, if the German Government was given the choice between standing up for the European project and it is very important that ‘Britain must not get a good deal because that might damage the European project’. Or actually saying perhaps we ought to be nice to our car industry, they will stand up for the European project.
“To cut a long story short, how much influence the German manufacturers can actually bring on the German Government is very questionable”.
The UK is the second biggest export market for German car manufacturers with a value of nearly £26billion.
Dieter Kempf, head of the BDI, which represents German Businesses, said it was the UK’s responsibility “to limit the damage on both sides of the Channel”.
I have always thought that actually Germany has got quite a lot to lose
He told the Observer: “Defending the single market, a key European project, must be the priority for the European Union. Europe must maintain the integrity of the single market and its four freedoms: goods, capital, services, and labour.”
The BDI has also warned German firms operating in the UK to brace themselves for a “very hard Brexit” and told its members to take precautions or be prepared to face heavy economic losses.
Managing director Joachim Lang highlighted the importance of ensuring as smooth a transition as possible and stressed that Britain remained one of the nation’s most important trade partners.
Ms Lea finished by adding if she were a German car exporter she would be concerned about the prospect of a “no deal” scenario with Britain.
She said: “If I were a German car exporter or a French wine exporter, or an Italian wine exporter or Spain, we have deficits with all of these countries.
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“I don’t think people realise what deficits we have with them. We are a very very important market to these countries.
“If I were any of those exporters, I would be concerned if there was a ‘no deal’ with the United Kingdom. In other words, they would then have to face the tariffs that this country would actually impose whatever they are, we don’t know what they are yet.
“The whole political dialogue in the European Union is all about the project and sticking together and not sort of letting Britain get away with it.”
Both Michel Barnier, the EU’s chief Brexit negotiator and David Davis, reiterated after the fifth round of divorce talks this week that both sides were preparing for “no deal”.
Source : EXPRESS