The head of Germany’s largest business group has said German firms will not push for a free trade deal between the EU and Britain after Brexit, despite the number of cars and quantities of other goods they sell in the UK.

In remarks likely to be seen as increasing the chance of a “hard Brexit” excluding Britain from the EU single market, Markus Kerber, head of the BDI, dismissed claims that German companies would not tolerate trade tariffs after Britain leaves, and said Germany’s relations with the rest of the bloc were more important.

“I have read a lot of articles in the British press saying Germany would be a relatively soft negotiator because 7.5% of German exports go to Britain,” Kerber told BBC Radio 4’s today programme. “Well, 7.5% is a big number – but 92.5% goes somewhere else.”

Leading pro-Brexit politicians, including the foreign secretary, Boris Johnson, have argued that economic imperatives – the German cars, French cheese and Italian wine sold in the UK – would oblige the EU to offer Britain a favourable trade deal, including some compromise on control over free movement which Theresa May has said is Britain’s first priority.

But, much as German manufacturers valued good relations with UK customers, Kerber said, it was “extremely important to us not to lose or alienate other European markets”.

He said the level of “political ill-will” against Britain on the continent was “much, much bigger than economic rationality” – in part because the bloc’s single market and eastward expansion had been “core UK strategies” and it was now “exactly those countries whose migrants are causing headaches in Great Britain”.



Ultimately, Kerber said, there was “no difference, for the BDI, between the political view and the economic view”. Pointing to huge investments made by German carmakers in central Europe, he said: “For us, the single market, eastern Europe and freedom of movement – they are all one deal, that is inseparable.”

Carlos Ghosn, chief executive of the Japanese carmaker Nissan, said on Thursday that his company would demand a UK deal offering compensation for any eventual trade costs resulting from Brexit before it committed to more investment in its Sunderland plant.

“If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government,” Ghosn said at the Paris car show. “If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation.”

In a speech seen as confirming his preference for a hard Brexit, Britain’s trade secretary, Liam Fox, on Thursday hailed Britain’s chance to become a full independent member of the World Trade Organisation after Brexit and said leaving the EU was a “golden opportunity” for the UK to trade with the rest of the world, particularly developing markets.

A survey of the EU-27 by the Bloomberg news agency also revealed unanimous opposition to the UK remaining a member of the single market if it refused to accept freedom of movement.

Positions in Brussels and the other EU capitals were hardening, the survey found, with even traditional allies such as Ireland now insisting Britain should not be allowed to “cherry pick” in upcoming exit negotiations.



Several countries are demanding Britain end up with “inferior” terms to those it currently has, while others want it to keep paying into the EU budget in exchange for whatever benefits it does get. Some countries, particularly in central Europe, have threatened to veto any Brexit deal that does not guarantee the rights of their citizens to live and work in the UK.



Kerber said an agreement curbing EU immigration while retaining privileged access to the single market was impossible, and the arrangement the British government appeared to be seeking was “not what the continental Europeans are willing” or even able to give.

“If British decision-makers look very hard at what it is and what it will be that they get, there is no other option than the hard exit,” he said, adding that that might be better than “a fudge in the middle that does not work politically and would leave uncertainty lingering on”.

Separately, the French foreign minister, Jean-Marc Ayrault, said before a meeting with Johnson in London that the EU referendum had been won by demagoguery, lies, half-truths and exaggerations. He said he was sure Europe could survive, and could only hope for the same for Britain.

“The United Kingdom and the European Union have just been victims, in June, of one of those fits of demagoguery,” Ayrault said. “Brexit will jeopardise neither the European Union, I am sure, nor the United Kingdom, I hope.”

He said Brexit was “rooted in lies, exaggerations and caricatures, we must remember. I say this with all the more tranquility because the promoters of Brexit after the referendum admitted, on leaving the ship, that their promises were not sustainable. The supreme irony is that they left the burden of the negotiation to a prime minister who campaigned to stay in the union.”