Effects on the regional economy A Brexit would heavily impact the Rhineland
Bonn · The greater Cologne-Bonn-Düsseldorf area would be left vulnerable in the event of a Brexit because of extensive trade with Great Britain. No other region in Germany would be more severely affected. But there might also be opportunities.
The figures are impressive: Europeans would suffer a loss of revenue of 40 billion euros if the UK withdrew from the EU without a transitional deal. This is the result of a study presented by the Bertelsmann Foundation on Thursday. Germany would be hit particularly hard with a loss of ten billion euros. The NRW government districts of Düsseldorf and Cologne would have to cope with the most significant cuts.
In concrete terms, experts in the governing district of Düsseldorf expect losses of 650 million euros (126 euros per inhabitant). No other region in Germany would be more severely affected by a hard Brexit. The second largest loss would be in the governing district of Cologne with a loss of 560 million euros (also 126 euros per inhabitant). The third largest loss would be in Upper Bavaria, including Munich, where 526 million euros in loss of income are forecast (115 euros per inhabitant).
Brexit would hit companies first
But the authors of the study do not assume that individual incomes of workers would fall immediately if open trade with Great Britain were to end in one fell swoop. It only predicts trends that would first hit companies and then lead to fewer hires, less generous pay raises and lower government tax revenues.
Bertelsmann expert Dominic Ponattu says that free trade expands possibilities but new trade barriers would hit the Rhineland particularly hard. "The fact alone that the British pound depreciated so sharply against the euro after the Brexit referendum at the time has made our products more expensive on the island," he says.
NRW Economics Minister Andreas Pinkwart (FDP) confirmed this trend. "The economy has already reacted to the threat of Brexit," he said. Great Britain is now only the eighth most important trading partner for NRW, no longer in fourth place as it was a few years ago.
Opportunities despite Brexit
100 British companies have located themselves in NRW since the Brexit referendum, which has created around 2,200 new jobs. A study from the German Economic Institute (IW) also points out that a Brexit could also be a great opportunity for NRW if it did not provoke a recession. "Provided we have a soft Brexit," said IW Director Michael Hüther, "NRW companies could enter into new supplier contracts with European companies that have previously worked closely with British companies."
The aim is not so much to attract the headquarters of companies from Great Britain to NRW as it is to attract production facilities. For example, Ford experts in Cologne report that the biggest carmaker in NRW has recently started to source many parts from the region and continental Europe instead of relying on suppliers from the U.K. Pinkwart: "The Brexit remains an unfortunate decision by our British friends that we did not want. At the same time, we are determined to seize the economic opportunities that may arise for us." NRW now intends to increase its efforts to attract manufacturing companies from Great Britain to locate in the Rhineland. Orig. text:Reinhard Kowalewsky Translation: Carol Kloeppel
