IMPACTS OF THE BREXIT ON GERMANY
IMPACTS OF THE BREXIT ON GERMANY
By Samira Shakirova Law clerk BridgehouseLaw LLP
According to research done by Germany Trade and Invest (GTAI), the economic development agency of Germany, Germany has experienced a substantial growth through foreign investment last year. 2062 companies opened up businesses in Germany last year, which is a growth of 8% compared to the previous years.
Most of the investments came from the US, followed by Switzerland and China. In the fourth place is the UK, with so many British companies launching businesses in Germany like never before. A survey among those British companies revealed that 45% of them relocated because of the Brexit. When asked why they particularly chose Germany, they answered that the size of the German market and the location within the EU were one of the most crucial reasons. Also, the positive environment for establishing a business in Germany attracted many investors.
The most popular branches, which launched or relocated their businesses in Germany are corporate and financial services, information technology, consumer goods and machine tool manufacturers. While some of these branches focus on having their sales and marketing departments in Germany, others also relocated their research and production facilities to Germany, as well.
A popular city among corporate and financial services is Frankfurt, which happens to be the financial hub of Germany, with over 200 Banks and most importantly the location of the European Central Bank. The transaction volume for real estate in Frankfurt increased by 44% compared to the previous year. The foreign investment ranked Frankfurt at the top of the list of German cities in the real estate market. It is expected that over 10.000 jobs will be created in the Frankfurt area alone.
While Germany and especially its city Frankfurt seem to be benefitting in this situation, this development also involves sacrifices. The rents in Frankfurt are constantly rising and make affordable housing impossible. A study forecasts that Germans will incurre billions in loss in wages for each year after the Brexit. Furthermore, the future of German companies in Britain is still uncertain and the impacts of the Brexit on the German economy are not foreseeable.
Post June 7, 2019.