German finance chief, carmakers warn of risk if UK leaves EU

AP News
Posted: Mar 03, 2016 11:25 AM
German finance chief, carmakers warn of risk if UK leaves EU

LONDON (AP) — The debate over the economic cost of Britain leaving the EU heated up Thursday, with the CEO of Rolls-Royce cars telling staff that the bloc's open borders are good for business, and Germany's finance minister warning a U.K. exit would destabilize Europe.

Finance Minister Wolfgang Schaeuble told a conference of the British Chambers of Commerce that Europe would be "less stable and more volatile" without Britain in the EU.

Asked what Germany would do if Britain left the EU, Schaeuble said: "We would cry. But I hope we will not."

Rolls-Royce Motor Cars chief Torsten Muller-Otvos said the EU's free trade arrangements help the firm, which is owned by Germany's BMW Group. In a letter to staff at Rolls-Royce and Mini — which is also BMW-owned — he said "tariff barriers would mean higher costs and higher prices, and we cannot assume that the U.K. would be granted free trade with Europe from outside the EU."

Britain will hold a referendum on EU membership June 23, and economic arguments are likely to be crucial to deciding how many people vote.

Big business in Britain is by and large in favor of remaining in the EU, though foreign-owned firms have been wary of accusations of meddling in Britain's decision. BMW head of sales and marketing Ian Robertson denied BMW was saying car prices or labor costs would definitely go up if U.K. leaves the EU. He said the company was pointing out the advantages of the EU's open market covering 28 nations and half a billion people.

"We've built our business on a 500-million market called the EU, and I think that is a very successful business that we wish to continue to move forward," Robertson told the BBC.

Britain's Society of Motor Manufacturers and Traders said support for continued EU membership is widespread across the auto industry. The group, which represents dozens of carmakers and parts suppliers, said Thursday that 77 percent of its members backed remaining in the bloc in a survey.

"We are part of a fully integrated European company where we benefit from the free movement of goods and people, and we believe not to be part of the EU would be undesirable for our business and the sector as a whole," said Rory Harvey, managing director and chairman of GM-owned Vauxhall.

Some 200 small-business leaders, however, signed a letter backing an EU exit. The letter, coordinated by the group Leave.EU, said leaving would give firms more "flexibility and adaptability."

Signatories included bosses of taxi companies, couriers, construction and removal firms, mortgage advisers, florists and more.

British Chambers of Commerce director-general John Longworth said Britain faced a choice between "the devil and the deep blue sea."

"The long-term risks of staying in the EU are likely to be as daunting as the short-term risks of leaving," he said.