Two of largest business associations say letting UK opt out of aspects of free movement could endanger EU

Two of the largest German trade associations have come out in support of Angela Merkel taking a firm stance during negotiations over Britain’s exit from the EU, even if it comes at a short-term cost.

Speaking at a briefing in Brussels, the presidents of the Association of German Chambers of Commerce and Industry (DIHK) and the German Confederation of Skilled Crafts (ZDH) said that granting Britain an opt-out from the four freedoms – free movement of goods, services, capital and persons – could amount to the “beginning of the end” of the single market.

“You cannot say: ‘I take part on three counts but not on the fourth,’” said the DIHK’s Eric Schweitzer. Untangling the unity of the four freedoms, he argued, “creates the risk that the whole of Europe would fall apart”.

“The economic consequences would be dramatic. The single market has played an important part in us having growth and prosperity in Europe.”

Hans Peter Wollseifer, the president of the ZDH, said he agreed with his counterpart from an economic point of view, but warned that the rest of Europe should not let the UK “drift off too far”. The EU had to learn from Brexit, Wollseifer said, and “maybe be a bit more restrained in passing laws and regulations that affect even the smallest business”.

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The ZDH represents more than a million businesses and over 5m employees in Germany.

Last week, the German chancellor, Angela Merkel, appealed to businesses and lobbyists in Germany to support her stance during upcoming negotiations with Britain, telling an audience of business leaders that any exception to the EU’s single market rules would represent “a systemic challenge for the entire European Union”.

Markus Kerber, the leader of Germany’s largest industry group, the BDI, said recently that trade, investments and single-market solidarity with the rest of the EU were more important than the volume of business German companies do with Britain.