Trading places: The UK, Germany and France

German sports fans The UK is now Germany's number one trading partner

We will hear a lot this week about the UK's relationship with the rest of Europe. The 50th anniversary of the Elysee treaty also shines a spotlight on the relationship between Germany and France, which these days looks decidedly strained.

But we shouldn't forget that the UK is pretty important to Europe as well. And - on one measure, at least - our economy is now even more important to Germany than France.

We are constantly reminded that the eurozone is the UK's largest trading partner. But the reverse is also true.

If you look at both exports and imports, the eurozone economies do more business with the UK than any other country, including the US. On average, we accounted for nearly 14% of eurozone exports between 2007 and 2011 and just over one-tenth of its imports.

If that doesn't surprise you, maybe this will: the UK recently overtook France and the US to become Germany's single largest trading partner.

David Marsh points out, in a note published today, that Germany's combined trade with the UK in the first nine months of 2012 came to 153bn euros (£128bn; $204bn).

That's more than France or the US.

Figures on the UK side suggest that the reverse is also true - that the UK's total trade with Germany is now slightly higher than with any other country, including the US.

This may not last, but it's consistent with a broader trend in Germany's trade, away from other eurozone countries, which has been much debated in Germany and France, and was flagged up last year by the likes of Goldman Sachs.

The latest figures show that only 37% of German imports and exports in the first three-quarters of 2012 were with other euro member states, down from more than 45% when the euro started in 1999.

As the UK's trade ministers know very well, the fastest growing markets for German products aren't in the UK but in the Bric economies.

The likes of India and China now account for about 10% of German exports. We only sell 5% of our exports to these economies, and France doesn't do much better at 6%. (Consolation prize: the Netherlands, Spain and the Republic of Ireland do even worse.)

By 2020, Jim O'Neill from Goldman Sachs predicts that Germany will be exporting twice as much to China as to France.

It's dangerous to extrapolate. Especially, perhaps, where China is concerned. But it's fair to say that the trade ties between Germany and its euro partners, which helped drive the creation of the single currency in the first place, are not nearly as strong as they were 10 years ago. Whereas Germany's trade with euro "outs" like the UK and Switzerland continues to grow.

I was at an annual get-together of British and French politicians and business leaders this weekend, where the irony of recent events in North Africa was much discussed. Our bilateral security relationship with France has been getting stronger, just as our relationship on European matters has hit a new low.

One senior French thinker and businessman joked: "We make war with the British, and we try to make money with the Germans." The UK seems to be learning to do the same.

Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this

    Comment number 55.

    John from Hendon it would seem that you are of the same lunatic mind as that of HILTER and Napolean.


  • rate this

    Comment number 54.

    Becareful stephanie you risk being called a little englander by "little old me" if you state facts n show that germany n france need us and we buy a lot of their goods.

    Also I will add we are the biggest military power in europe and the protectors of it. They need us.

  • rate this

    Comment number 53.


    "... German Nazi party - technically extreme left (the clue is in their name - National Socialist Party)...."


    So the European People's Party are communists too, then?

  • rate this

    Comment number 52.

    If we decide to exit the EU then trade will just continue as before. We will still need to comply with EU trade rules but we have the same thing with (say) USA. What we will be rid of are the rules & regs decided by unelected EU Commissioners and a huge saving in money which can be spent on UK instead of contributing to the costs of the EU undemocratic, German run 4th Reich.

  • rate this

    Comment number 51.

    #39 WW2 was caused by German Nazi party - technically extreme left (the clue is in their name - National Socialist Party).

    There is no possibility of war in EU, that is just scaremongering.

    It is entirely possible to disagree with the direction the EU is taking without being a Xenophobic bigot

  • rate this

    Comment number 50.

    This article deals with two extremely important points. One is the extent to which the continent needs/relies on our market & I suspect would do whether or not we are part of the EU!. The other far more important point is that the EU is becoming a major distraction: our minds should be set on the BRIC countries. Thats where there is money to be made and massive, massive markets to export to

  • rate this

    Comment number 49.

    What about the complicated, Eurozone merger? Well structured and acceptable terms for a '17 country Treaty', must take at least a decade. Politicians strutting like turkeys in Brussels is one thing, but nobody is getting down to the nitty gritty . As far as the UK is concerned, the present day EU will been radically transformed. All we need is fair trade. We dont want a Mother State

  • rate this

    Comment number 48.

    43 Your language becomes more absurd and reactionary by the minute.

  • rate this

    Comment number 47.

    JFH - it is possible to disagree without being a lunatic of the extreme right.
    Currently the EU has a democratic deficit and an endgame only for the generation of a super state - I do not wish it or its citizens ill. I would just like to see some reform. In the case of the Euro that must include transfers from rich to poor. As occurs in all currency blocks. And no, I wouldn't want to join in that.

  • rate this

    Comment number 46.

    36.jonathanbw - ".......Or maybe things will carry on pretty much as they are, in which case the pro-EU scaremongering should be viewed as propaganda.."

    That the best you can up with is a "maybe things will carry on as they are" neatly shows the paucity of the leave the EU arguement..... would be a hell of a gambol with our youngsters' future at best.....

  • rate this

    Comment number 45.

    42.IR35_SURVIVOR "#39 JfH I find your last comment very offensive."

    It was meant to be deeply offensive. You and your fellow travellers are propelling this country to war! Just as you did when you supported to blandishments of the BUF in the 1930s.

    I am pleased that you class yourself as a right wing anarchist and are correctly see yourself as a xenophobic bigot. Just so long as we all know.

  • rate this

    Comment number 44.

    It is quite apparent that the political class are stuck firmly in a past which ceased to exist some years ago always assuming it ever existed in the first place. Forever they are playing catch-up.

    To argue that we can stand on our own in the modern world is just delusional. Once upon a time an empire would stand with us but now that has gone we have to cooperate with our neighbours.

  • rate this

    Comment number 43.

    We (in the EU) need to have a single currency.

    Depression has caused a rise of extremism all over the EU, but rational and sane people need to stamp on every expression of this - if we for one moment waiver in our resolve to do so then the forces of anarchy will briefly triumph and raise the spectre of death for millions.

    Isn't the extermination of right wing anarchists a small price to pay?

  • rate this

    Comment number 42.

    #39 JfH I find your last comment very offensive.
    for the last 350years the UK has had to intervine or varoius side
    between germany france and spain as each or a combination have sort to force a euro emipre and aslo destroy the UK in the process.
    HITLER,NAPOLEAN,MOSSELINI etc and taken greats like Wellington and CHURCHILL to stop them
    This time are trying to do it together,

    so pls del #39

  • rate this

    Comment number 41.

    The last round of devaluation has directly led to the erosion of household incomes (relative to outgoings) in the UK, choking off demand - fresh devaluation will undoubtedly boost exports but will still do net damage to our economy through high inflation.
    As for joining the Euro - when you spend more than you earn the ability to print your own currency is a useful if scary fallback of last resort.

  • rate this

    Comment number 40.

    Yes, can we please get out of EU and carry on as slaves of _our_own_ City.

  • rate this

    Comment number 39.

    Xenophobic bigots arise you have nothing to loose except your jobs!

    The EU and Euro haters MUST understand that are they propelling their children into an early grave they are also crippling their job prospects.

    Fix our EU & our Euro. They provide the best (possibly the only) hope for a prosperous and peaceful future.

    You lunatics of the extreme right caused the last war - don't cause another!

  • rate this

    Comment number 38.


    "... That creates a euro state...which history shows cannot work..."


    I've removed the unnecessary and irrelevant sensational word.

    History very much shows the reverse, e.g. a dollar state seems to work, as does a sterling one.

  • rate this

    Comment number 37.

    UK needs to decide exactly where it wants to stand, at the moment there is too much indecision causing stagnation and indecision further down the line for all:

  • rate this

    Comment number 36.

    Of course, if we leave the EU or even have a referendum, the French will stop selling us their wine, the Germans will refuse to let us buy their cars and the Danes won't let us have any bacon... Meanwhile they'll all stop buying what we produce.

    Or maybe things will carry on pretty much as they are, in which case the pro-EU scaremongering should be viewed as propaganda..


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