German economists advise Merkel's government to navigate Brexit shock with transitional trade deal

Helen Cahill
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Merkel has said Brexit negotiations must conclude before trade talks start (Source: Getty)

Germany's economic advisers are pushing for a transitional arrangement between the UK and the EU to allow for Brexit to progress without any economic shocks.

Economists have told Germany's minister for economics and energy, Brigitte Zypries, that a "deep and comprehensive" free trade agreement with the UK is necessary to safeguard Germany's economy, German newspaper Frankfurter Allgemeine (FAZ) reported.

However, the economists, who work for the government on an independent advisory board, said it was unlikely a full trade deal could be negotiated by March 2019, and that a transitional agreement must be made.

Read more: German firms fear Brexit will trigger more instability in the EU

In particular, they said London must join the European Free Trade Association, a regional trade organisation comprising Iceland, Liechtenstein, Norway and Switzerland.

Hans Gersbach, chairman of the Zypries' advisory board, told FAZ that even during tough negotiations the aim of securing a comprehensive free trade agreement with the UK should not be questioned.

The push for a transitional agreement on the continent comes as European politicians refuse to consider starting trade negotiations with the UK. German Chancellor Angela Merkel has said negotiations on the future of the UK-EU relationship will not start until Brexit talks have concluded.

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