Source: German view of Ireland’s exposure
Europe’s biggest economy is going to take a substantial hit from Brexit. Almost 15 percent of the cars made in Germany are sold in the UK, while BMW makes Minis and Volkswagen makes Bentleys in England for export to the continent. Now one in four German companies expects to export less to the UK in the short term and fully half of them expect to do less business there once the break has actually taken place. Yet there is awareness both in business and political circles in Germany that Ireland’s exposure is of a different magnitude and that we have more at stake in general
A 32-page report from the German-Irish Chamber of Industry and Commerce – shows something of the depth and breadth of that awareness. “At the very least, Britain’s departure from the EU will mean new obstacles to trade. This will impact more on Ireland than almost any other EU nation. In 2014 the value of Irish goods and services exports to the UK amounted to 17% of the economy’s GDP, while most other EU countries exports to the UK are in low single digits. As a consequence, Brexit has the potential to cause long-term detrimental effects on Ireland’s economic growth and levels of employment.”
The report zooms in on an important distinction which gets lost in general statistics: the UK takes just 12% of the exports of foreign companies operating here but no less than 43% of the exports of indigenous companies. It doesn’t quite highlight the extent of the danger here because we know that those indigenous export are mainly in the agri-food sector which is utterly vulnerable to a WTO tariff regime.