Brexit is “the greatest political risk” facing German foreign trade and investment, the head of the country’s leading industry group warned on Tuesday.
“Businesses urgently need clarity about the rules by which the transition and future relations will be shaped ,” said Dieter Kempf, echoing the demands voiced recently by British industry chiefs at the start of the UK’s formal exit negotiations.
But Mr Kempf, president German industry association the BDI, warned the British election had not made the situation easier and the ball still lay in the UK’s court.
“The EU negotiating position was correct. But let’s not fool ourselves: this is above all about limiting the damage as much as possible”, he said.
Mr Kempf was speaking at the BDI annual conference where German chancellor Angela Merkel and Martin Schulz, her social democrat rival, are due to go head to head over economic policy – ramping up their campaigns in advance of a September election.
The encounter comes as new forecasts confirmed the German economy is growing fast despite the global political uncertainty and the tensions between Berlin and US president Donald Trump.
Ifo, the economic institute, predicted economic growth of 1.8 per cent this year and 2 per cent for 2018.
Mr Kempf said the economy was in “a very good” condition with industrial orders at their highest level in six years. But he warned the risks represented by Brexit that Mr Trump’s policies threatened international economic openness.
Repeating previous attacks on the Trump administration, he said the withdrawal from the Paris climate accord was “only the shrillest of the disturbing signals” sent so far to the international community. “Predictability was yesterday,” he told the conference.
The BID chief urged Germany to respond with confidence and do business not only with the US but the whole world. But he insisted transatlantic ties remained vital.