THE impact of a no deal Brexit scenario would have “grave consequences” for the German economy and cost the nation billions, a top business leader has warned.
The Chief Executive of the German Chamber of Commerce (DIHK) Martin Wansleben insisted the European Union is right to issue Britain with an ultimatum as talks continue.
He warned a no-deal agreement is becoming increasingly likely and took aim at the pace of the ongoing Brexit negotiations.
Mr Wansleben said: "On March 30, 2019, the British are probably out of the EU. Therefore a no-deal Brexit is becoming more likely. For the German economy that would have grave consequences.
"Brussels is rightly increasing pressure and giving the British an ultimatum. Because the sixth Brexit round of negotiations has ended with barely noticeable progress again.”
Mr Wansleben told the German newspaper Welt: "In the car sector alone, the export of motor vehicles faces €2.35 billion additional customs costs.”
In the chemical and pharmaceutical sector, German exports of more than €11bn would generate customs duties of around €200 million per year.
Mr Wansleben said: “The figures underline the importance of a common single market and the free movement of goods in Europe for the German economy.
"Quick solutions are wanted, there can be no cherry picking for the UK."
It comes as a number of business leaders across the European Union met Prime Minister Theresa May in Downing Street for talks with Business Secretary Greg Clark and Brexit Secretary David Davis.
The meeting was designed to "discuss the common opportunities that open up for the industry as the United Kingdom prepares for its exit from the EU".
And invitees included the German BDI, Medef from France, Confindustria from Italy, CEOE from Spain, VNO-NCW from the Netherlands and a handful of British associations.
CBI Director-General Carolyn Fairbairn said the message from European business leaders was "we need urgent progress on the divorce issues so that we can move on to trade and transition by December".
The prospect of a ‘no deal’ situation and Britain walking away from the Brexit talks is still a strong possibility.
Michel Barnier, the EU's chief negotiatior, as well as other EU heads, insist the question of a divorce settlement must be finalised before trade talks can start along with questions of the right of residence for EU citizens in Britain and British citizens in the EU and the border between Northern Ireland and the Republic.
Should no deal be reached without an agreement, both sides would be subject to the rules and regulations of the World Trade Organization (WTO).
A ‘no deal’ situation would also impact the UK economy with Ms Fairbairn warning: "The overall impact, undoubtedly, of the ongoing uncertainty is fewer jobs, less investment, less economic prosperity across Europe.
"That was the mutual interest that was dominating today in the meeting, the idea that there is a win-win out here - sometimes it feels like lose-lose, we can turn this round into win-win and the next few weeks will be absolutely critical to that."
Emma Marcegaglia, president of the lobbying group BusinessEurope, said it was crucial for progress to be made within two weeks in order for trade talks to be given the green light by EU leaders at December's summit.
She told reporters in Downing Street: "The message is that as businesses all over Europe we are strongly united.
"We are very concerned for the fact that we don't really see progress in the negotiation and we know that there are two weeks to get to sufficient progress so that in the council in December it can be decided to go on to phase two.
"So, these two weeks are absolutely important.
"We need to have a transitional period where the UK stays in the customs union and single market because companies need certainty."
She added: "We don't want uncertainty, we are very concerned. We know that if companies don't see certainty probably they will have a contingency plan and probably they will leave the UK, or they will invest less.
"So, these two weeks are extremely important."
Mrs May faces a tough time tomorrow as the Government’s Brexit legislation returns to the Commons with the Conservative leader facing the possibility of attacks from both the Eurosceptic MPs as well as those still supporting the EU.