According to the Financial Times, business leaders in Germany are raising the alarms at the lack of progress on Brexit negotiations, warning that German industries may have to begin acting in their best interest and start preparing for a no-deal Brexit.
Key quotes
“German business leaders have raised the alarm over the state of Brexit negotiations and are urging the UK government to soften its position ahead of make-or-break talks with Brussels in the coming weeks. “We have reached a critical phase. The time that remains is incredibly short,” Joachim Lang, the director-general of Germany’s BDI industry federation, told the Financial Times.
“If there is no agreement by mid-November, German companies will start implementing their emergency plans for a no-deal Brexit,” Mr Lang said. “In a no-deal scenario, and without a transition phase, we would end up with a border and customs regime that no one is prepared for. There would be considerable uncertainty, there would be interruptions to supply chains and the UK industrial base would take a hit.” Mr Lang also voiced criticism of the UK position as set out in London’s recent Brexit white paper, in particular with regard to its proposal on trade. Among other points, the paper calls for a post-Brexit scenario in which the UK remains part of a single market for goods with the EU, while excluding the free movement of services, capital and people.
“The UK says it wants to keep the free movement for goods but become independent with regard to the other freedoms. We believe that cannot work,” said Mr Lang. Separating goods from services and the flow of people and finance, he added, was simply not possible in the modern economy. “When we sell a piece of machinery today, we don’t just sell the product. We also sell services, data and maintenance,” he said. “You cannot pick one freedom but leave the other three on the sidelines. That simply does not work with modern industrial goods. We are not selling a piece of chocolate.”
His stance was supported by Bernhard Mattes, the president of Germany’s VDA car industry federation, which represents groups such as Volkswagen, Daimler and Bosch. Mr Mattes told the FT: “When you sell an industrial good you don’t just sell iron, steel and plastic “” there is always a service that comes with the product.” “
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