Damasky: Cooperation between the 27 Members States has priority
Brexit will first and foremost weaken the British economy, explained Michael Hüther, Director of the Cologne-based German Economic Institute (IW) at today’s Forum Automotive Logistics in Frankfurt. The forum is organized by the German Association of the Automotive Industry (VDA) and the German Logistics Association (BVL).
In his lecture entitled “The Channel is getting wider – what Brexit means for German industry,” Hüther said: “It is gradually becoming apparent that the British Government entered the talks without a plan and unprepared, and is unable to resolve any of the controversial issues in its own interest. It is irresponsible to conduct negotiations in this manner because at the end of the day the British citizens will have to pay the bill for Brexit.”
The United Kingdom is already struggling with the effects of the uncertainty caused by the Brexit decision. For example, economic growth is much slower in the UK than in the euro zone, which used to lag a long way behind the UK. This can be seen on the automotive market: in Europe 15.6 million units were sold in 2017, which was around 3 percent more than in the previous year. By contrast the UK did not maintain its high level of recent years and recorded a drop of 6 percent in sales.
“Britain is one of the most important trading partners for Germany, and for the automotive industry in particular,” according to Hüther. “Yet the Europeans should be tough when negotiating in Brussels because the future cohesion of the European Union is at stake.”
In the following panel discussion with Prof. Hüther, Dr. Joachim Damasky, VDA Managing Director, drew attention to the closely interconnected value chains. For the German vehicle makers, Britain is one of the most important export markets. In addition, the German automotive industry has around 100 production sites in the UK, most of them facilities belonging to German supply companies.
Damasky commented: “Of course we have close economic and political ties with the United Kingdom, and that should remain the case as far as possible. However, the EU and Germany have a clear priority – that the other 27 Member States should remain together. The customs union and the single market are models for success.”
Practical solutions would have to be found for the period after the transition phase, the VDA managing director stated, adding that reliable legal conditions and continuity in all regulatory issues were important prerequisites for expanding economic relations. Damasky emphasized, “Whatever agreement is reached between the UK and the Continent, it is already clear that nobody is going to benefit from Brexit.”