Angela Merkel scared as Chancellor stokes fear of British competition against EU
ANGELA MERKEL renewed her concerns Brexit will transform the United Kingdom into a strong competitor that will heighten "pressure" on Germany's business.
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Angela Merkel warned employers across Germany will face increasing pressure in the aftermath of Brexit because of the competitive role the UK will take on after quitting the European Union completely. The German Chancellor welcomed the progress made on the withdrawal agreement and expressed her hope the new Parliament will be able to accept it in full. But addressing the Confederation of German Employers' Associations (BDA), Mrs Merkel said: "I see a very great chance for this deal to be accepted on the British side and that would be good for all of us.
"Why has this been achieved now? We managed to do so because it was clearer what Britain wanted."
The German Chancellor continued: "On the one hand, this is a painful piece of news - no customs union, life as a non-EU country.
"Basically as a competitor on our doorstep. We have to be well aware of this.
"It will put even more pressure on us."
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In the Summer, Germany reported a surprise fall in its GDP which was quickly dismissed as Mrs Merkel rejected calls to unleash stimulus packages to cope with the "difficult phase" the country was facing.
The European Commission’s Autumn 2019 Economic Outlook reported Germany, the EU’s biggest economy, is showing significant stagnation over the coming years.
Berlin’s GDP is this year forecast to grow only 0.4 percent, and then one percent in 2020 and 2021.
The Commission’s economists were forced to revise their summer forecasts down from previous estimates of 1.4 percent for next year.
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The autumn report says: “After slipping into a technical recession in mid-2019, Germany’s economy is expected to see muted growth over the forecast horizon.”
A slump in Germany’s manufacturing and automotive exports are blamed for much of the downturn in the country’s financial fortunes.
Meanwhile, despite predictions of a catastrophic downturn in the run-up to the Brexit referendum in 2016, Britain’s Gross Domestic Product is predicted to remain stable for this year, 2020 and 2021.
The Commission reported the British economy had remained "resilient but modest and is forecast to grow at a broadly stable pace over the forecast horizon."
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The report added: "The resilience of GDP growth this year has been driven by domestic demand.
Private consumption growth has been supported by a strong increase in real wages, reflecting a tight labour market, and an expansionary fiscal policy.”
The UK’s expected GDP growth has been revised up from the forecasts for summer 2019.
This year GDP is forecast to grow by 1.3 percent, 1.4 percent in 2020 and 2021, which is up 0.1 percent on previous estimations.