The showdown can begin: Next Tuesday, the fate of the “best possible Brexit deal” (according to the EU) will be clarified in the British House of Commons, until Friday probably also the future of Prime Minister May. Two victims have already been determined – they are not British.
We are talking about Germany and Italy. Unless everything is mistaken, both countries slipped to the brink of recession at the end of last year. At least one quarter of growth is likely to be negative.
The long-booming German economy had already run out of steam by mid-2018. GDP shrank by 0.2 percent in the summer quarter – the first decline since the beginning of 2015, reports “Wirtschaftswoche”.
Italy’s economy is no longer growing either. As we can hear in EU circles, the growth expectations for 2019, which had only been agreed with the government in Rome in December, are already outdated.
In addition to the diesel gate and the sales problems of the German car industry, the mood in the German economy is being dampened above all by Brexit concerns. For Germany, the UK is an important car market and supplier.
Should it come to a hard Brexit, even a real crisis threatens, warns ING chief economist Brzeski. “The drops that could trigger a recession are the trade war between China and the USA and the threat of hard Brexit.”
This is interesting for two reasons. First, Federal Economics Minister Altmaier is still optimistic. Chancellor Merkel also pretends that everything is in perfect order. The German government is sleepwalking into the crisis
Second, it has always been said that a hard Brexit would hit the British worst. “Spiegel online” reports that almost every day new bad news are coming from British companies. But the economy has not yet collapsed.
This makes it all the clearer that Germany is particularly vulnerable – and that the EU Commission could also be mistaken. Their plans for Italy are already waste paper, and things are also looking gloomy for France…