October 18, 2019 / 11:25 AM / a month ago

German business lobby see withdrawal deal as cushioning Brexit impact

BERLIN (Reuters) - German business groups have expressed relief at this week’s Brexit deal, believing that if it is approved by British lawmakers it would minimise the economic damage to both sides, which they fear would be worse with a disorderly divorce.

FILE PHOTO: A share trader reacts as he reads the headline "Brexit chaos" at the start of the trading session the day after the Brexit deal vote of the British parliament at the stock exchange in Frankfurt, Germany, January 16, 2019. REUTERS/Kai Pfaffenbach/File Photo

The longrunning saga over how and when Britain leaves the EU has cast a cloud over the German economy, Europe’s largest. Germany is teetering on the brink of recession as its exporters suffer from Brexit uncertainty and the fallout from the trade dispute between the United States and China.

British Prime Minister Boris Johnson clinched a withdrawal deal with the EU on Thursday, although its fate hangs on what is expected to be a tight vote in the British parliament on Saturday.

The overwhelming reaction among German business groups to the agreement was one of relief as if it goes through it avoids a no-deal Brexit.

“We regret Britain’s withdrawal from the European Union. (But) the way ahead that has now been found minimises the damage to all parties,” said BDA employers’ association managing director Steffen Kampeter.

“The new Brexit deal is better than a hard exit,” said Joachim Lang, head of the BDI industry association.

Holger Bingmann, president of the BGA export association, added: “We are very relieved ... if after three years, a no-deal can now be avoided, then it was worth the wait.”

Brexit has already had a tangible impact on German business with Britain. In the January-July period of this year, the UK slipped to seventh place on the list of Germany’s foreign trade partners, down one spot from 2018, the Statistics Office said.

In 2015, the year before Britons voted in a referendum to leave the bloc, the UK was Germany’s fifth biggest trading partner.

If it is passed by British lawmakers, the deal would have to be ratified by the European Parliament, which would not be expected to oppose it.

Eric Schweitzer, president of the DIHK chambers of commerce, noted these hurdles, but added:

“The withdrawal agreement painstakingly negotiated between the UK and the EU could soften the consequences for German businesses.”

Reporting by Klaus Lauer and Paul Carrel; Editing by Frances Kerry

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