Highlighting the impact Brexit will have on two of Europe’s most powerful countries; Germany and France

Words by Husam Elgenied

At first, Britain’s vote to leave the EU was thought to unsettle the German economy harder than Europe as a whole an institute for economic research told us. Large doubt in the first few months following the UK’s referendum could slash “Germany’s GBP by up to 0.4% points, while the Eurozone’s economy could lose 0.2% points in the same time span” a study concludes. Institute experts detect there will be a lot more decreased in UK exports and trade then the 3% it has already dropped in early 2016. This decrease happened before Brexit, therefore, this will now lead Germany to re-examine investment into British trade. Germany is the largest import partner with 6 billion of goods coming into Britain from one of Europe’s capital countries in November 2016, mainly the car industry is the principal sector when it comes to German exports to the UK, keeping for 25% of all exports in 2015. According to the German association of the automotive industry (VDA), “around 800,00 new vehicles were exported to the UK in 2016” in fact that is nearly one-fifth of all exported German cars. The industry has 100 production plants in the UK and a lot of them are facilities of German supply companies. When Theresa May triggered the Article 50 process in March she was told by trading experts the two-year gap for negotiations for the separation and future trade deal was not an easy-going task. “The EU needs Britain, and Britain needs the EU” said by the president of the VDA Matthias Wissmann, this brings us to believe that not only will the Germans be affected however the British automotive industry would also be hard hit which would leave a difficult and expensive resolution.

France is one of the most influential countries in the European Union that will be affected by Brexit. The biggest French industry that is going to feel the most effect from the vote is the agriculture industry. British supermarkets distribute a lot of French products such as wine and dairy products, all supplied by French farms.  With trading becoming more expensive, not only will these products be less accessible but they will be more expensive to purchase, meaning that the British public is less likely to buy it. In 2015, the total value of exports from France to the UK was worth over €31 million, to break this down into key agricultural sectors, exports into the UK from the wine and spirits industry was €1.4 million and items such as dairy and bread was a total of up to €4.5 million. This is a clear demonstration of how trading in the EU prior to the vote is a substantial impact in the UK and this is likely to change. On the other hand, there are some positives that the vote could have on France. For a while, Britain has been discussing if they were going to leave the EU which has been believed to make the euro weaker. This means that now Britain is out of the EU it means that the Euro can stabilise and possibly become stronger. Another benefit is that France could end up claiming a spot in the top 5 most powerful economies. Paris has encouraged UK businesses to reposition to France which would mean that they have a longer lasting access in the EU and the trade.

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