February 27, 2018 / 12:08 PM / in 8 months

German firms doing business in UK gloomy about Brexit - survey

BERLIN (Reuters) - German businesses that trade in Britain are pessimistic about their prospects there, and some are planning to move operations to other markets, a survey by Germany’s DIHK Chambers of Industry and Commerce showed on Tuesday.

FILE PHOTO: German Chancellor Angela Merkel and Britain's Prime Minister Theresa May after a news conference in Berlin, Germany, February 16, 2018. REUTERS/Hannibal Hanschke/File Photo

The survey, to which some 900 German firms operating in Britain responded, showed just 12 percent expected an improvement in business prospects there, with 36 percent expecting a deterioration. Fifty two percent expected no change.

FILE PHOTO: Business leaders including Germany's BDI Managing Director Joachim Lang and Carolyn Julie Fairbairn director-general of the Confederation of British Industry pose for a group picture outside 10 Downing Street, London, November 13, 2017. REUTERS/Peter Nicholls/File Photo

“Almost a year before the departure from the EU, the consequences of Brexit are a barely calculable risk,” DIHK President Eric Schweitzer said in a statement. “That is unsettling many German businesses.”

The exact consequences of Brexit for their businesses were still unclear to half of the firms in the survey, added Schweitzer, who appealed to the British government to set out reference points for a future relationship as soon as possible.

Eight percent of those surveyed with investments in Britain already planned to move operations elsewhere due to Brexit. Schweitzer attributed this to firms perceiving a risk of rising costs due to customs levies and new layers of bureaucracy.

FILE PHOTO: Germany's BDI Managing Director Joachim Lang and Carolyn Julie Fairbairn director-general of the Confederation of British Industry arrive with other business leaders in Downing Street, London, November 13, 2017. REUTERS/Peter Nicholls/File Photo

“In my estimation, the sword of Damocles of a no deal still hangs menacingly over our bilateral economic relations,” he said, adding:

“In addition to swift clarity on Brexit, the EU and the (German) government must also ensure that the internal market for the remaining EU 27 countries is further strengthened.”

Britain’s trade minister Liam Fox will warn on Tuesday that staying in a customs union with the EU after Brexit would leave the country in a worse position than now, calling such a prospect “a sellout of Britain’s national interests.”

The extent of any British post-Brexit involvement in a customs union - which binds members into a trade bloc with common external tariffs - has emerged as one of the key issues of contention between Britain’s two main political parties.

Writing by Paul Carrel; Editing by Hugh Lawson

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