Warning for Merkel: Germany RUNNING SCARED of a no-deal Brexit, say think tank

Leopold Traugott made his remarks after a spokesman for German Chancellor Angela Merkel suggested the British target of having a withdrawal agreement in place by the October deadline was an “ambitious” challenge, in response to the publication of the White Paper on the subject last Thursday.

Mr Traugott, a policy analyst with the Open Europe think tank, said: “It is not Merkel that is exerting increased pressure here, it is simply that the Brexit clock is ticking, and time to achieve a deal is getting scarce.

“German policy-makers understand that the Chequers proposal is a step forward, but so much still remains to be sorted. 

“And if you look at the continued uncertainty over the backstop for the island of Ireland, concluding the Withdrawal Agreement by October definitely is ‘ambitious’.

“I think it’s just Germany again stressing that time is running out and negotiations have to move fast now. ”

Mrs Merkel met with her cabinet to discuss the White Paper yesterday – although she has not so far commented publicly, likely deferring to Brexit negotiator Michel Barnier, whose team is studying to document in great detail.

Mr Traugott added: “German politicians are obviously aware of the negative impact this could have on parts of their economy. 

“Businesses generally back Merkel’s tough line in Brexit negotiations, but they also expect her to deliver a deal that keeps trade barriers low, and of course would not take kindly to a no-deal outcome.

“It is true that the UK would be hit hardest in such a scenario, but we need to remember that also many EU member states would face significant troubles, particularly the Northern ones.”

A study by professional services network Deloitte last month suggested that a no-deal Brexit would have a severe impact on the German car industry.

The survey suggested the total revenue from vehicles in the UK would fall by approximately £11billion (€12.4billion), drop of 18 percent, and profits by just over £805million (€900million).

In the first year of Brexit, car sales would fall by roughly 550,000 units (equal to 19 percent) in the UK. 

As a consequence, Deloitte predicts that approximately 18,000 jobs in the German car industry would be put at risk.

In a blog on Open Europe’s website, Mr Traugott’s colleague Georgia Bachti said: “Both negotiating sides have a strong interest not only in concluding a free trade agreement, but also in ensuring a smooth transition period between the UK’s full membership to the EU and their new relationship. 

“With German jobs and exports from one of the country’s biggest industries at risk of being severely hit by a failure to conclude a trade deal, it becomes clear that a successful negotiation of all aspects of the UK’s withdrawal is will serve the interests of all.”

Speaking on BBC4’s Today programme last month, Chancellor Philip Hammond stressed a “cliff-edge” scenario was in nobody’s interests.

He explained: “This is not just a UK problem. This in an issue in the European Union as well.

“Companies in Germany who want to supply goods to car manufacturers in the UK need to know the basis on which they will be supplying them in three or four years.”