Birmingham’s Christmas market is thriving. Crowds of people are drinking glühwein, eating bratwurst and enjoying the traditional atmosphere of the kind found at this time of year in Dresden, Nuremberg or Leipzig.



The Midlands city is celebrating 50 years of being twinned with Frankfurt. It has hosted a Christmas market since 1997 – it is now the biggest outside Germany – and there are no signs that Brexit will change that.

But while business is booming at the marker, other German firms in the UK are worried about what the future holds. No one can predict what rules will govern foreign enterprises once Britain leaves the EU.

Will the UK have access to the single market? If not, what tariffs will be imposed? Will foreign workers be allowed into the UK and under what conditions? All these questions have still to be decided.

Mark Dodsworth, the director of Europartnerships, a small business that advises companies trying to grow exports into and from the UK, has a gloomy answer. The company, which works on behalf of the German chambers of commerce, has seen fewer clients this year. “It was a quiet year for us,” says Dodsworth. “People who are supposed to make decisions just wait and thus delay investments.”

Ulrich Hoppe, the director of the German-British Chamber of Industry and Commerce (GBCIC) in the UK, agrees. “While the big firms remain committed to the UK, there is also uncertainty and reluctance about major investments in the future. Heads of companies wait and see,” she says.

German subsidiaries employed almost 400,000 people in the UK and accounted for £200bn total sales, according to 2013 figures from the GBCIC.

Among the biggest German manufacturers in the UK, it is business as usual for those that operate mostly within the country, while the companies that rely on imports and exports are increasingly nervous.

Tom Blades, the chief executive of Bilfinger which provides engineering and services in the UK and has about 4,000 employees, says: “Because these services are primarily provided locally, a Brexit would have little direct impact.”

The dairy products firm Müller, which is proud of making all its British products with milk from the country’s farms, says it has plans to invest and grow its business here.

But those who rely on international supply chains are less calm.

Emma Begley, a spokeswoman for BMW, says: “The result of the EU referendum creates uncertainty for the automotive sector in general and for overseas investors in particular. Uncertainty is not helpful when it comes to making long-term business decisions.”

Uncertainty is also an issue for the engineering and infrastructure group Siemens. Its spokeswoman Anne Keogh says the fact that it has a significant presence in the UK means “we hope a speedy and amicable agreement can be worked out within the promised timescale”.

Alexander Moscho, the chief executive of the chemicals and pharmaceuticals firm Bayer UK, says: “Nervousness will grow with time passing over preparations and we would prefer clarity about the terms of Brexit so stability can be brought to the market.”

“It is crucial to have reliable conditions,” he says because it takes 10 years to develop a new medicine. Discussions with Bayer’s global headquarters about forthcoming projects “have naturally become more intensive”.

A Mini is driven off the assembly line at BMW’s factory in Cowley, Oxfordshire. Photograph: Leon Neal/AFP/Getty Images

The UK is an important location for Bayer in several areas, including research and especially clinical and agricultural product development, according to Moscho. “We have partnerships with leading UK universities. When the EU grants such as the Horizon 2020 programme subside, if they are not substituted by local funding, the sustainability of the excellence of our partners’ science could be at risk,” he says.

Moscho says he has noticed that international candidates for top managerial positions have started to pull back. “I hope that this will not hurt the competitiveness of UK companies in the long run.”

Siemens, BMW and Bayer are not the only businesses closely monitoring what happens during Brexit negotiations. When the German chancellor, Angela Merkel, spoke in Berlin this week at an annual meeting of German employers, she said there should be no exceptions to the principle of free movement of labour for the UK. “Then the other countries would also want exceptions,” she said.

Some businesses, led by banks and financial services companies, are already taking precautions for a hard Brexit.

Eric Menges, the chief executive of the company that promotes Germany’s Frankfurt Rhine-Main region, was in Birmingham this week, not for the Christmas market but to make contact with UK business people.

Frankfurt has opened an office in Birmingham and is seizing the chance to attract banks and financial companies based in the UK. “We are not here to lure away business from the UK,” says Menges, “but if enterprises are willing to open subsidiaries in Frankfurt we are ready to help. We are well connected with the airport, have international schools and we are located in the midst of Europe. We are just the ideal site.”

• Anna Lehmann is a political correspondent at the Berlin-based daily newspaper taz.die tageszeitung and currently works in the Guardian’s offices on the George Weidenfeld bursary, an international journalists’ exchange programme