The citizens of the United Kingdom have taken part in a referendum in which they have voted to leave the European Union (cf. statement by Federal Minister Sigmar Gabriel and interview with Handelsblatt). Although the decision is regrettable, it has brought more clarity to the situation. The European Union is able to act upon this situation and in the coming weeks will discuss how to proceed. German companies do not need to fear legal uncertainty. The markets will remain open. The functioning of the internal market is not jeopardised.
The UK government must now decide on the submission of the official withdrawal notification. The withdrawal negotiations with the EU institutions will be initiated only after notification. All rights and obligations will continue to apply to the UK until the negotiations have been concluded.
The information provided here discribes current economic relations and answers FAQs about the withdrawal procedure, the impact on German businesses and citizens and future cooperation between the EU and the United Kingdom.
The United Kingdom in the European Union
The United Kingdom joined the European Union on 1 January 1973, together with Denmark and Ireland. This brought the number of Member States to nine. The United Kingdom comprises Great Britain (England, Wales and Scotland) and Northern Ireland. With around 65 million inhabitants, the UK accounts for 12.8 per cent of the total EU population.
Current economic relations with the United Kingdom
Germany and the United Kingdom share close trade relations. As regards imports, Germany is the most important trading partner for the United Kingdom, while Germany ranks second behind the U.S. in terms of exports from the United Kingdom. The United Kingdom ranks ninth in terms of German imports and third in terms of German exports (in 2015, it took fifth place among Germany's trading partners, with a trade volume of €127.6 billion). In 2015, the volume of German exports to the United Kingdom totalled €89.3 billion, with the most important goods being motor vehicles and vehicle parts (€29.1 billion) and machinery (€8.8 billion). UK imports amounted to €38.3 billion. The most important goods that Germany imported included motor vehicles and vehicle parts (€6 billion) and other vehicles including aircraft and spacecraft (€4.4 billion).
Around 2,000 German enterprises employing approx. 420,000 people are doing business in the United Kingdom. German investors in the United Kingdom include Siemens, Bosch, BMW, VW, RWE, E.ON, Deutsche Telekom, Deutsche Post, Linde and Heidelberg Zement. In 2014, German direct and indirect investment in the United Kingdom totalled €109.9 billion.
More than 1,300 UK firms employing a total of more than 220,000 members of staff operate in Germany. In 2014, UK direct and indirect investment in Germany totalled €37.9 billion, focussing on the manufacturing industry, the chemical sector and the oil industry (including BP, Shell, GKN, Rolls Royce).