Germany is concerned about a risk of Brexit

For some time now, the controversy surrounding the possible voluntary exit of the United Kingdom from the European Union has been in the media and has led to numerous political negotiations. Indeed, Brexit, the abbreviation “British Exit”, would have important repercussions on the European economy

For some economists, leaving the United Kingdom would be a political disaster while for others it would strengthen the European Union. In any case, the European Union would lose one of its three greatest powers, a strong diplomatic ally of the United States and one of the world’s largest financial centres. Among the countries of the European Union, Germany fears above all the exit of its British comrade from the Schengen area.

Fear of German companies

According to many German companies, the fact that the United Kingdom is no longer part of the European Union would cause an economic disaster for Germany. And this would not be limited only to financial market turbulence. The United Kingdom is Germany’s third largest trading partner with an estimated export volume of nearly €89 billion in 2016.

german flagMore than 2,500 German companies are present in Great Britain, employing nearly 500,000 British people. In addition, there are approximately 3000 British subsidiaries in Germany. With the abolition of a single market, these relations could become more and more complicated.

According to a survey published by the Bundesbank, German companies reduced their direct investment in the United Kingdom by almost 6% in the first quarter of 2016. Many German companies are postponing or even cancelling their planned projects in the United Kingdom. This will significantly slow Germany’s economic growth and will continue to slow it down if the Brexit project is implemented.

However, outside the scene, politicians have already prepared for the worst. Mr Schäuble, Mrs Merkel’s Minister of Finance, said in an interview that “Europe will continue to function without Britain” in order to reassure morals.

Germany alone among the Mediterranean countries of the European Union

Once again, the exit from the United Kingdom would be dramatic for Germany. Germany needs a strong partner to promote Europe’s economic and financial stability. Without his comrade the United Kingdom, it would be very complicated and the Mediterranean countries of the European Union would come to take over Germany, which would have to use these countries to export their goods.

eu england

Budgetary disciplines should then be taken by politicians in Berlin. Without the United Kingdom, Germany would have more difficulty channelling money into the struggling economies in the southern part of the Eurozone. In the long term, she would see herself alone paying the bill.

A possible Euroscepticism following Brexit?

As Germany knows, leading an organization leads to many criticisms and often unfair. Brexit would strengthen Germany’s position as a leader within the European Union. Germany then strongly fears Europe’s protectionist philosophy, which could feel oppressed by German economy and politics.

brexit germanyFrance, Italy and some other European countries are afraid that Brexit will make it easier for Germany to impose its austerity policies in the Schengen states. Many EU Member States fear that Brexit will only make Belin’s role more weighty than it already is. Consequently, many other proposals to leave the European Union could be considered, which would greatly complicate the European economic system currently in place.

  • High volatility is expected on June 23rd so take advantage of Brexit and speculate with for CFDs and AnyOption for binary options.