February 23, 2024

(Bloomberg) — Germany’s economy would be ruined if it pulled Britain out of the European Union, as the far-right Alternative for Germany party has proposed, according to Finance Minister Christian Lindner.

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Lindner said in an interview with Bloomberg TV in London on Monday that the EU’s single market is “extremely important” to Europe’s largest economy and that a so-called “Dexit” would be the worst-case scenario for export-dependent Germany.

“It will ruin our economy,” he said. “That’s why we have to tell people, OK, you may not be in line with government policies, but that’s no reason to change the entire system and change what our wealth is based on.”

Prominent politicians and business executives have repeatedly warned that the AfD’s approach to a German version of Brexit would be disastrous for economic activity.

AfD co-leader Alice Weidel called Brexit a “model for Germany” in an interview with the Finance Times last month and proposed holding a referendum to “let the people decide, like in Britain.”

The anti-immigrant party has been able to take advantage of voter anger to rise to second place behind the main opposition Conservatives in opinion polls in recent months. Chancellor Olaf Scholz’s three-party coalition of Social Democrats, Greens and Free Democrats has seen support decline.

Lindner’s Free Democrats are under particular pressure as polls show they are in danger of missing the 5% threshold to reach parliament in the next elections due in late 2025.

Lindner acknowledged that Germany’s competitiveness “is not as good as it should be” and said he was preparing proposals in the next few months on how to boost it, “especially in the financial sector.”

Read more: German coalition punished in 2021 election repeat in Berlin

He said he is “very optimistic” about the economic outlook and expects improvement “very soon” – as long as the government manages to improve the framework for doing business.

Germany was the only Group of Seven economy to shrink last year, and a growing number of economists — including Deutsche Bank and Commerzbank, the country’s two biggest lenders — predict another contraction for 2024.

The outlook for the next years is not much better, with the government’s Council of Economic Advisors estimating the potential growth rate at only 0.4%.

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