UK and German firms fret over impact of Brexit

A survey of 700 British and German companies found that nearly four out of five support the UK remaining part of the European Union (EU), while 29% said they would either reduce capacities in the UK or relocate altogether in the event of a Brexit.
For survey respondents, Brexit was defined as a UK departure from the EU, while keeping access to the European single market.

Participants were more evenly divided on the issue of whether the UK will actually depart from the EU, with 46% predicting that voters would decide that Britain should leave and 47% believing that the country would stay.

The study, entitled ‘The Impact of Brexit: Views from the German and British business communities,’ was commissioned by the non-profit German foundation Bertelsmann Stiftung and conducted by the UK’s Economist Intelligence Unit (EIU).

The online survey was carried in November and December 2015, when researchers asked 782 companies – 404 UK-based and 378 in Germany – about the potential impact of Brexit on their national economies, specific industries and companies.

A single market

More than half of the companies regarded the greatest benefit of EU membership as access to a large, single market. In the event of a Brexit, most UK businesses view retaining unfettered access to the single market as crucial. Many also voiced concerns about the impact of a Brexit on the UK’s employment levels in the three years after leaving, with 42% seeing a “negative” or “very negative” effect on jobs.

UK companies singled out complex regulation (34%) and uncertainty over the future of the euro (22%) as the main problems associated with EU membership are. Although frustrated by regulations enacted by Brussels, the UK financial sector is the most pessimistic about the potential ramifications of a Brexit.

“Many small- and medium-sized companies complain about EU regulation” Jürgen Maier, chief executive (CEO) of German manufacturer Siemens’ UK operations told The Guardian. Siemens employs 14,000 workers in UK and claims that a further 24,000 jobs are linked to the company via its supply chain.

“What people tend to overlook is that smaller engineering companies are often producing parts used by bigger engineering companies like us and therefore have to comply with those regulations either way,” Maier told the newspaper.

“You could call Brexit a risk, but I prefer to talk about what would be better for us. Do I want a future where we survive in the UK or do I want a future where we thrive in the UK?

“Of course, there may be trade barriers for Britain if it left the EU. But more importantly: we want the UK to be able to set standards for new development, and we couldn’t set those outside the UK. The same applies for research and development: you wouldn’t be able to define research fields relevant for Siemens in Britain.”

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