Brussels blames Brexit chaos after slashing growth forecasts for Germany

BRUSSELS has dramatically slashed its growth forecasts for Germany, blaming the Brexit chaos for a slump in car sales to the UK.

Eurocrats cut GDP predictions for the continent’s largest economy from 1.4% last year to just 0.5% this amid warnings of a continent-wide slowdown.

They downgraded eurozone expansion from 1.9% to 1.2%, citing uncertainty over ties with the UK and a brewing trade war between the US and China.

Italy, a ticking time bomb within the single currency area due to its high debt, will barely avoid recession this year posting just 0.1% growth.

But officials warned the UK is also ailing, with its forecast cut from 1.4% to 1.3% due to the weakest business investment since the financial crisis.

In a gloomy report yesterday the EU Commission said a no deal Brexit would constitute a “major risk” to future prosperity on both sides of the Channel.

The dossier said: “Economic activity in the EU slowed further in the second half of 2018 as growth in the global economy and trade weakened.

“Outside the euro area, car exports to the UK have been weak throughout 2018, partly reflecting the Brexit-related uncertainty.

“In Germany, GDP would have been 0.6% higher without such a fall in the automotive sector.

Uncertainty about the UK’s future relationship with the EU27 means that business investment is likely to remain weak.

EU Commission Report

“In the near term trade tensions as well as a No Deal Brexit pose significant downside risks to the outlook for the industry.”

The report also warns Ireland’s economic future is “clouded by uncertainty” due to the impasse in the negotiations .

Britain is fourth bottom of the continent’s growth league table, level pegging with France and just below the EU-wide average of 1.4%.

Our economy is expected to stagnate and expand once more by just 1.3% in 2020, whereas Germany and France will both bounce back to 1.5%.

The report says: “UK GDP growth slowed markedly in 2018 and is forecast to remain subdued over the forecast horizon.

“Uncertainty about the UK’s future relationship with the EU27 means that business investment is likely to remain weak.”

Pieter Cleppe from the Open Europe think tank said, the downbeat data shows why both sides should compromise to reach a Brexit deal and end uncertainty.

He told The Sun: “Europe’s economic data suggest it may be wiser to stop playing games.

“At the last EU summit, EU leaders didn’t dare to pursue No Deal, even if they had been claiming to be ready for it.

“Now it has been revealed as a pipe dream, the EU has only two choices left – tolerate a disgruntled UK obstructing EU business or show some flexibility.”

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