The director of the German economic think tank IFO told BBC Radio 4 Today Programme the BDI industry body is wrong to keep a hard line on Brexit to avoid weakening the European Commission’s negotiating position. Mr Felbermayr claimed the position failed to consider many businesses in Germany are already “suffering” from the uncertainty around the Brexit impasse and urged them to push the Commission to make concessions to Britain.
He said: “They keep to a hard line, they don’t want to weaken the Commission’s negotiation position.
“I think that makes sense, but at the same time, if you watch talk shows on TV in Germany, you see members of big businesses and business federations who do urge the Commission to make concessions and find a solution.
“Everyone knows that both sides would be hit quite severely by a hard Brexit.”
Professor Felbermayr added the EU should remove the backstop from the Withdrawal Agreement and keep the UK as a whole into a joint customs union to solve the Irish border issue.
He said: “I think the EU should, as a quick-fix at least, offer to remove both the backstop and the Withdrawal Agreement’s current time-limit on the mobility of goods and capital, so that the provisional agreement would keep the EU and the UK in a joint customs territory association even after 2020, without making a difference between Northern Ireland and the rest of the UK.”
With March 29 drawing ever nearer, the EU is still insisting that the Withdrawal Agreement will not be renegotiated.
This could be to their own detriment because if Theresa May does not manage to secure a deal Parliament will accept the UK will leave the EU in just 46 days with no deal.
According to a new study, a “disorderly Brexit” would hit the German economy worst of the EU 27.
The report warned: “In no other state is the effect on total employment as great as in Germany.”
The European power is expected to account for about one in six of all jobs at risk in a no deal Brexit scenario.
This news comes from scientists at the Leibniz Institute for Economic Research Halle and the Martin-Luther-University Halle Wittenberg found.
These figures spark renewed hope that Mrs Merkel might try to work together with Theresa May to secure a better Brexit deal.
Germany sold 770,000 vehicles to the UK in 2017 and brand new tariffs could jeopardise 15,000 jobs.
If the UK leaves without a deal trade with EU countries would be based on World Trade Organisation (WTO) rules, meaning a 10 percent tariff on car imports.
The report said: “The employment effects of a hard Brexit would be noticeable above all at the automobile locations.”