German firms to reduce investments in UK | Business| Economy and finance news from a German perspective | DW | 07.07.2016
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Business

German firms to reduce investments in UK

Quite a lot of German companies look set to lower their investments in the UK after the British vote to leave the European Union. But much will depend on Brexit negotiations between the EU and Britain.

A poll by the Association of German Chambers of Commerce and Industry (DIHK) among 6,500 German companies found that about a third of respondents with subsidiaries or offices in Britain were planning to cut back their investments in the UK after the country's decision to leave the European Union.

Roughly 35 percent of those polled indicated they'd reduce investments there because of mounting uncertainty about the mid-term and long-term impact of Brexit.

"The political and legal uncertainly after the British referendum has already seen one in four German firms cutting exports to the UK," DIHK President Eric Schweitzer said in a statement.

"The effect of the pro-Brexit vote gives us a better idea about what an achievement the creation of the EU's internal market has been," he added.

Many imponderables

The trade group estimated that overall German exports to Britain will drop by 1 percent this year to fall by 5 percent in 2017.

The poll also revealed that 26 percent of respondents believed that they'd have to cut jobs at their locations across the UK. But they emphasized that measures to be taken would hinge to a great extent on what a future trade agreement between the UK and the EU would look like.

While negotiations between the two sides have not yet started, 21 percent of British companies with subsidiaries in Germany are planning to invest more in Europe's powerhouse, and one in four is intending to increase its workforce.

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hg/jd (Reuters, dpa)

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