Germany business leaders fear Brexit could lead to a less competitive Europe

“I THOUGHT you were a pragmatic people, like us, not an emotional people like the Southerners,” says one bewildered Bavarian boss in his Munich office. He is not alone: German business leaders still cannot believe what happened on June 23rd. They are only gradually coming to terms with the idea that Britain, one of Germany’s most important trading partners and a crucial liberal voice in the European Union, may actually be leaving the party.

It is a possibility few bosses in Europe’s largest and strongest economy had prepared for. And the list of worries is growing rapidly, despite reassurance from Angela Merkel, Germany’s Chancellor, in a speech to parliament last week that the interests of German citizens and companies would be her number one focus during Brexit negotiations.

Most directly hit will be the thousands of German companies which have operations, factories or research centres in Britain, among them such household names as BMW, Bayer and Siemens. They worry about currency fluctuations, falling British demand and whether they will still be able to sell British-produced goods to the EU or beyond. Investment and hiring decisions are on hold, as are new research projects. Exporters from Germany are equally stuffed and none more so than car makers, which rely heavily on British customers. One in five cars made in Germany goes to Britain. Marcus Berret, from Roland Berger, a consultancy, reckons that Brexit will trigger a drop in car sales and profits after seven great years.

But it is a more fundamental, yet less-discussed, concern that is unsettling businessmen to the core, and not just German ones: loss of control. Without the British, they fear, the balance of power in the Brussels legislation-factory will shift to countries that favour protectionism over free trade. Bosses in every sector, from finance to pharmaceuticals, are worrying about the European regulatory climate when they can no longer count on the British banging their fist on the table, demanding free trade and lobbying for open markets. Britons at the European Commission are already being relieved of some of their duties. Over the coming months this will only get worse.

“Europe loses a sensible voice and a counterweight to the protectionists,” says an executive of a German chemical company. Nicolas Mackel, chief executive of Luxembourg for Finance, a development agency, frets that the loss of Britain’s liberal, pro-market voice will lead to a Europe where finance becomes more national, much to the detriment of exporters of financial services such as Luxembourg. Others worry that without British civil servants and scientists at the table, regulation-making, for example in the pharmaceutical industry, will tilt from being based on what is scientifically sound to “who cries the loudest”—meaning environmental lobbyists.

Despite all these worries, most German bosses are convinced that there will be a deal with Britain which essentially doesn’t change much. The interests on both sides to stick together are simply too strong, they argue. “Our economies are too intertwined, untangling is simply impossible,” says Tobias Nickel of Dräxlmaier, a car parts supplier. Alexander Lau of the Bavarian chamber of commerce is equally hopeful: “The EU was founded on business relations,” not political ones. And if Merkel lets the British leave, says a fund manager, “BMW would be on the phone in an instant shouting ‘are you crazy’?” by Agencies,