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Economy for British parliamentary election: "Our companies breathe"

2019-12-13T12:16:57.935Z


German industry welcomes the election outcome in the UK. However, economists continue to expect uncertainty over Brexit.



Finally clarity: The German economy also sees positive in the clear victory of the conservatives in Great Britain - and now calls for quick decisions.

"The political fog in London is lightening." With the election outcome is the task associated, the withdrawal agreement now quickly adopt, "said the Federation of German Industry (BDI) . No company in Germany wanted to Brexit. "Nevertheless, our companies are breathing down that finally a mandate for the acceptance of the exit contract exists." Let's start with a withdrawal on January 31st.

The German Chamber of Commerce and Industry (DIHK) called for "a quick decision at Brexit". Still threatening a no-deal, warned the association. The continuing uncertainty since the referendum in June 2016 has led to a decline in economic relations between Germany and the United Kingdom.

"For the all-clear, it is still too early"

"It does not look any better for the future, because according to the latest DIHK survey, more than half of German companies in the UK are expecting a worse economic development in the country by 2020," said DIHK President Eric Schweitzer. Due to the lack of clarity about future economic relations, local German companies are reluctant to submit their investment and employment plans. According to this, German companies have 2,500 branches in Great Britain and employ more than 400,000 people.


Ifo President Clemens Fuest also expressed skepticism: "It is expected that there is now a quick agreement on Brexit," said Fuest to the British Prime Minister Boris Johnson's election victory.

Read more about what Prime Minister Boris Johnson plans after the election

From an economic point of view, it follows that a hard EU exit with incalculable costs was initially averted. "For the all-clear, it is still too early," said the economist, who has long taught in the UK. "It will be difficult to agree a free trade agreement by the end of 2020 within the transitional period."

Fuest referred to a study by the EconPol Europe research network that the uncertainty surrounding Brexit cost the United Kingdom nearly € 20 billion a year. "Scotland is starting a second referendum on independence, which will also create uncertainty," said Fuest.

The President of the Kiel Institute for the World Economy (IfW), Gabriel Felbermayr, made similar comments . "An exit from Brexit is no longer possible," he said. "Whether it comes to a soft or hard or smart deal with the EU, but is still highly uncertain." The exit agreement governs the farewell, but not the future relationship of the EU with the Kingdom. By the end of 2020, a comprehensive agreement should be negotiated.

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Tolga Akmen / AFP

"This would have to go much further than the most ambitious free trade agreements the EU has ever negotiated," said Felbermayr. For example, the talks with Canada have dragged on for years, yet the agreement is still not fully in force. "It will probably come again to deadline extensions and hang-outs," predicts Felbermayr.

Brexit will continue to depress economic growth in the coming months

With continuing uncertainty, it is also expected that investment restraint by British companies will continue, said Sebastian Dullien, Director of the Macroeconomic and Economic Research Institute (IMK) . The same applies to German companies that operate in business with Great Britain. "In the coming months, Brexit will continue to burden economic growth in the UK as well as, albeit to a much lesser extent, in Germany," said Dullien.

The Conservatives of Boris Johnson achieved a clear victory in the parliamentary elections in Britain. According to media reports, according to the available final results, they come from 647 out of 650 constituencies to 362 seats in the lower house, which clearly exceeds the absolute majority threshold.

Source: spiegel

All business articles on 2019-12-13

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