German firms fear Brexit will trigger more instability in the EU

 
Helen Cahill
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German businesses are hopeful that Frankfurt will become a more powerful financial centre (Source: Getty)

Businesses in Europe's biggest exporting nation are worried that Brexit will precipitate more fragmentation of the European Union.

In a report on the views of German businesses about Brexit, Deloitte found that nearly half (46 per cent) expect that Brexit will lead to the fragmentation and weakening of the EU, and that there was a risk of more countries looking to leave the bloc.

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Deloitte surveyed 250 large German companies that have a trading relationship with the UK, and said nearly all of them (90 per cent) were now prepared for Britain leaving the EU.

More than half expected trade between Germany and the UK to fall, and said they would be investing less in the UK as a result of Brexit. One of the greatest risks perceived by German firms was a change in tax and regulation that will follow on from Britain leaving.

But German firms are seeing positives in the changes, and think that Frankfurt now has an opportunity to become more of a financial centre.

Read more: What the EU27 really thinks of Brexit and the City

The German Chancellor Angela Merkel has made it clear that the UK will not be able to keep its access to the EU single market if it no longer wants to preserve freedom of movement for people.

And, it seems the German business community agrees with her; around half think the UK should be completely excluded from the single market if it does not allow EU citizens to enter the country freely.

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