The negative consequences of a No Deal Brexit on an already fragile German economy have once again been laid bare by a study that finds around 100,000 jobs could be hit if Angela Merkel fails to secure a deal with the UK.
A leading economic research institute in Germany, the Halle Institute for Economic Research, have warned that the areas most affected would be Wolfsburg and Dingolfing-Landau, with the two areas hosting jobs linked to Volkswagen or BMW.
As the one of the report’s authors, Oliver Holtemoeller lays out: “The employment effect of a hard Brexit would be felt above all in the automotive.”
With Bloomberg reporting that Germany’s reliance on exports makes it particularly at risk, it is another reminder of the leverage the UK still has in the Brexit negotiations. European economies would take a hit but unlike the UK, would not be able to act fully independently with unilateral controls that Britain would possess outside of the EU.
Germany has just seen factory orders decline by 7% in one year, nearly halved its 2019 growth forecast and Deutsche Bank have warned: “The start of the German economy into 2019 has been a major disappointment so far.
“The development of several key cyclical indicators is telling us that the German economy is drifting towards recession right now.”
If Angela Merkel allows the UK to leave without a deal, she is likely to face fury domestically.