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.

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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.”