Threat of German recession is positive for Brexit deals
UK Prime Minister Boris Johnson is hopeful of achieving a successful Brexit negotiation as he meets with German Chancellor Angela Merkel, helped by the possibility of a German recession.
Meeting in Berlin this week, Johnson, who was elected in mid-July, was given 30 days by Merkel to find a solution to the Irish backstop dilemma, which would prevent a hard border between Northern Ireland and Ireland.
Johnson said he was happy with that timetable and thought it would be workable for the UK.
“You have set a very blistering timetable of 30 days, if I understood you correctly, I am more than happy with that,” he said.
Nigel Green, chief executive of financial advisory group deVere Group, said previously Germany had had a ‘united front’ with the rest of the European Union but that the threat of recession was causing it to reconsider.
The German Bundesbank was warned a slump in exports, Brexit and the US/China trade war were among factors responsible for a 0.1 per cent drop in GDP in the three months to June. Forecasts of annual growth of 0.5 per cent were likely to be downgraded to 0.2 per cent.
Green said: “I would suggest that the reason a ray of hope has appeared in what has until been a united front from EU member states against Britain’s Brexit stance is because a recession is looming over Germany – the EU’s largest economy – meaning both sides need a good and fair deal more than ever.
“The reason why Boris Johnson’s Brexit plan may appear to be gradually gaining traction is not that he is a genius strategist, it is because of the economic headwinds gathering over the EU.”
AUTHOR
Laura Dew
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
