Business owners in Europe’s largest economy were holding their collective breath this week, wondering whether clarity would finally come on Oct. 31 after three years of uncertainty over Brexit.
The answer was a resounding no.
“It is high time that we conclude this issue,” said Holger Bingmann, president of the German export association BGA, after the European Union agreed on Monday to extend the deadline to pass a divorce deal through the British Parliament to January 2020.
Bingmann implored Europe not to approve any further delays because uncertainty is choking Germany’s $4-trillion economy. As Brexit drags on and global trade wars persist, the export-driven country has seen trade to the United Kingdom plummet.
“Probably, at the moment, it is in a very mild recession,” says Christian Odendahl, chief economist at the Centre for European Reform, who adds that the German economy is famously interconnected with the rest of Europe, and also with Britain.
“The Brexit uncertainty is already hurting. German companies need to divert their supply chains away from Britain just to be safe,” he says. “And when and if Brexit really happens, I think there will be another hit to the German manufacturing sector.”
Even small businesses are suffering.
Antje Blank’s shelves are stocked with curds, marmalades and British sweets inside the Broken English grocery shop in Berlin. She says the extension to Jan. 31 and the new parliamentary election announced Tuesday in London don’t guarantee that a no-deal Brexit is off the table.
“It is extremely worrying,” Blank says, who needlessly prepared for a crash out at the end of this week by stockpiling inventory. “We’ve ordered absolutely everything we need to get us into the new year.”
It’s a similar story at Paul Kündiger’s Berlin print shop, where he makes 80 million stickers a year. Some of his most lucrative contracts — up to 20,000 euro a month — are in the U.K. Like many business owners, he’s been forced to make a plan B. His includes starting a new business in London to avoid slowdowns in production. His stickers must arrive to his U.K. customers within two days.
Kündiger has even launched his own mini public relations campaign. He prints glossy stickers of the Union Jack stamped with the phrase “Exit From Brexit” printed across it, and hands them out to pro-Europe customers.
“We’ve printed many hundreds of these,” he says.
A Political Crisis Brewing
There’s no doubt the EU wants to avoid the economic injury a messy Brexit would bring to the entire continent, and that’s a big reason why the bloc has allowed London more time, Odendahl says.
“Europe has been quite clever maintaining pressure on Britain, but at the same time making sure the flexibility is at a maximum to avoid a no-deal,” he says.
But there are also political calculations.
A survey by the European Council on Foreign Relations in May found the highest EU approval ratings across the continent since 1983. But a majority also feared the bloc would collapse in the next 10 to 20 years.
A significant number of those polled even believed a war among European countries is a “realistic possibility” in the coming decade.
“The time in which we live is very unquiet,” says Alexandra Hildebrant, director of the Checkpoint Charlie Museum in Berlin. The museum is just steps away from the infamous crossing point into communist East Berlin during the Cold War where many people died trying to cross into the West.
Reflecting on the 30th anniversary of the fall of the Berlin Wall in November, Hildebrant says Brexit plants seeds of division. If other countries separated themselves from the EU and focused only on national interests, “We will come back to the time of war. It will be dangerous,” she says.
German Chancellor Angela Merkel paired Germany’s dark history with fears of Brexit disunity this spring. At a press conference in Dublin, she related to Ireland’s fear that Brexit would reignite sectarian violence along its northern border.
“I personally come, after all, from a country that for many years was divided by a wall,” Merkel said. “For 34 years, I lived behind the Iron Curtain so I know only too well what it means once borders vanish, once walls fall and that one needs to do anything in order to bring about a peaceful cooperation.”
For now, unity is a theme that even Euro-skeptics in Germany aren’t willing to give up on. The far-right Alternative for Deutschland party, or AfD, flirted with the idea of making a German exit from the EU an official part of its election platform — a so-called Dexit.
“If there are no reforms, if there is no movement, if it’s just asking for more and more money and getting more and more members and the structure is just growing, then, of course, Dexit is an option,” says Hugh Bronson, a Berlin state lawmaker and AfD spokesman for European affairs.
But for now, Bronson says Germany and other smaller European countries could not compete with ascendant superpowers like Russia, China and the United States without a unified front.
“If another major partner leaves the EU,” Bronson says, “the idea of the European Union is dead, make no mistake about that.”
This segment aired on October 30, 2019.
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