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Categorized | Economy

BDI warns of ‘ill will’ to UK over Brexit

Posted on September 29, 2016

COLOGNE, GERMANY - NOVEMBER 22: Markus Kerber, member of the board of Bundesverbandes der Deutschen Industrie poses for a picture on November 22, 2013 in Cologne, Germany. (Photo by Ute Grabowsky/Photothek via Getty Images)

Markus Kerber, director-general of the BDI, Germany’s leading business body

The head of Germany’s leading business body says the UK should not underestimate the “political ill will” in Europe, and that London would be better off seeking a hard Brexit rather than a fudge that creates “lingering uncertainty”.

Markus Ke
rber, the director-general of the BDI, told the BBC Today programme on Thursday: “If British decision makers look very hard at what it is that they want, and what it will be that they get, then there is no other option than the hard Brexit.”

    His comments come as divisions emerge in the British government over what sort of trade relations the UK should be seeking in the negotiations on the UK’s exit from the EU, with some ministers arguing it is critical to maintain access to the single market.

    However Mr Kerber said: “It is better to have a hard Brexit that works than to have a fudge in the middle that may have to be renegotiated and doesn’t politically work and you have uncertainty lingering on.”

    Mr Kerber acknowledged the UK was a key market for German industry, taking 7.5 per cent of German exports. But he made clear the EU and Germany would not give the UK a preferential trade deal.

    “Well 7.5 per cent is a big number but 92.5 per cent goes somewhere else. The vast majority goes to other European countries. So, as much as we would like to uphold our very good relations with British customers, it is extremely important for us not to alienate other European markets.”

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    He also warned that “the political ill will in Europe is much, much bigger than the economic rationality”, alluding to the anger felt in EU capitals that the UK is now quitting the bloc having been a champion of the single market project and one of the strongest supporters of enlarging EU membership.

    “If you look at the fact that the extension, the enlargement of the European Union to eastern and central Europe, was at the core of British strategising and it’s exactly those countries whose migrants are causing headaches in Great Britain, you will find it relatively easy to understand why the political ill will in Europe is much, much bigger than the economic rationality,” he said.

    Mr Kerber’s comments mark a significant hardening in the BDI’s position. In July he told the Financial Times: “We should not talk about punishing people, if we don’t know that we might be punished ourselves.”

    In separate comments in the immediate aftermath of the June vote, he said imposing trade barriers on the UK and protectionist measures “would be a very, very foolish thing”.

    The BDI at that stage was urging “politicians on both sides to come up with a trade regime that enables us to uphold and maintain the levels of trade we have”.

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