Brexit is leaving its traces – and these are now visible. Economic and trade relations between Germany and Great Britain are in crisis. This is also explained by the evaluation of the state-owned company Germany Trade and Invest (GTAI). According to it, Germany’s trade with Great Britain is developing against the general trend. In 2021, the UK’s importance as a trading partner dropped to tenth place. “While trade with all of the other top ten partners in the Corona rebound increased almost exclusively in double-digit form, trade with the UK shrank by as much as 4.6 percent,” GTAI expert Marc Lehnfeld told the news agency. dpa.
In 2015, the trade turnover between Germany and Great Britain was still EUR 127 billion. In the aftermath of Brexit, this was systematically falling, and after 2021 it dropped to 97 billion euros. Imports from Great Britain fell by 8.5 percent. Thus, they dropped back to their 2003 levels. Exports to the island were the lowest since 2010 at EUR 65 billion. In the fourth “German British Business Outlook”, the audit firm KPMG presented an exciting analysis. From December 2021 to February 2022, 60 companies were surveyed about their business relationship with the UK. Two of the most important findings: Sales of every third company dropped and the costs of business relations with Great Britain are rising significantly – incl. because of higher tariffs.
Three actions for better economic relations between Germany and Great Britain
Linus Digital Finance (ISIN: DE000A2QRHL6): The German FinTech works as a modern real estate financier. Linus Digital Finance finances exciting real estate projects through an in-house debt fund. The Berlin-based company enables investors to participate in real estate projects via an online platform. Many of these projects are based in Germany, but Linus Digital Finance also finances attractive UK real estate. The group maintains close economic ties with Great Britain, which is reflected, inter alia, in in strategic partnership with alternative asset manager Bain Capital Credit. This partnership brings Linus Digital Finance up to € 183 million to develop real estate financing operations in the UK and Germany. The real estate market on the island is important to FinTech, which is why Linus Digital Finance cares about good economic relations with Great Britain.
Volkswagen (ISIN: DE0007664039): The British market has traditionally been very important to VW. What many don’t know: The auto group has very close ties that lead to the island. The British handed over the Volkswagen plant in Wolfsburg to the Federal Republic of Germany as a trustee more than 70 years ago.
German Post (ISIN: DE0005552004): As the world’s leading postal and logistics group, economic and trade relations with Great Britain are also important to Deutsche Post AG. The range of services has suffered from Brexit.
Does the UK fall out of the top ten of German trading partners?
iShares STOXX Europe 600 Cars and Parts (ISIN: DE000A0Q4R28): ETF, which has many companies with close economic ties to Great Britain that derive from the automotive industry. In addition to VW, the leaders are Daimler (ISIN: DE0007100000), Porsche (ISIN: DE000PAH0038) and BMW (ISIN: DE0005190003).
Amundi ETF MSCI UK (ISIN: FR0010655761): This ETF takes the other side, made up of the major UK companies. These include AstraZeneca (ISIN: GB0009895292), Unilever (ISIN: GB00B10RZP78) and Diageo (ISIN: GB0002374006).
In order for the UK not to fall out of the top ten of German trading partners, it needs companies that will maintain trade relations and improve economic relations with the island. If successful, the stocks of these companies may also show interesting price movements.
Disclaimer / Risk Warning
Conflict of Interest: There is a paid IR and PR agreement with Linus Digital Finance. The content of the services is intended, inter alia, to raising the level of company awareness. Dr. Reuter Investor Relations therefore acts in the interest of Linus Digital Finance when creating and distributing the article. It is an advertising editorial representation.
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