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German companies threaten to scale back investment if Britain leaves EU

Xinhua, May 20, 2016 Adjust font size:

A majority of German companies are prepared to reduce their investment in Britain if the country decides to leave the European Union at a referendum next month, a study showed on Friday.

The United Kingdom is scheduled to hold a referendum on June 23 on its membership of the EU. A total of 61 percent of German companies running business in the UK said they would scale back their investment if British voters were to say "No" in the ballot, according to a survey released by the Association of German Chambers of Commerce and Industry.

Four in five German companies expected a "Brexit" to have negative impacts on their business. Nearly one third of companies said it would affect their investment at a "very negative" level, meaning that more than 10 percent of the investment would be drawn back.

"A Brexit would be highly detrimental to all involved," said Clemens Fuest, head of German Ifo economic institute, "Germany would be the EU's biggest loser since Britain is a key market for its exports. As for Britain, it would damage itself with a Brexit."

Currently, some 2,500 German companies have subsidiaries in Britain, which is the fifth biggest trading partner for Germany.

A recent study showed that if the UK leaves the EU, German economic output would suffer a loss of up to 45 billion euros (50.55 billion U.S. dollars) by the end of 2017. Enditem