Germany said to be unshaken by May's Brexit pledge to Nissan

German Chancellor Angela Merkel’s government is relaxed about the assurances Britain gave to Nissan Motor Co., viewing attempts to keep the carmaker in the U.K. as inevitable given the expected negative economic fallout of Brexit.

British efforts to keep companies based in Britain are understandable as Prime Minister Theresa May has to do what’s needed to prevent the economy from rupturing, according to a German government official familiar with the chancellery’s thinking. Pledges made now won’t necessarily reflect what happens once Britain has left the European Union, said the person, who asked not to be named because Merkel’s government hasn’t commented publicly on the matter.

“That the U.K. government is trying to make economic or fiscal concessions to keep companies from leaving the country reflects the British fear of the consequences of Brexit,” Michael Fuchs, deputy leader of Merkel’s Christian Democrat-led parliamentary bloc, said in an interview on Tuesday. “We will not engage in a subsidy spiral here, but will focus our energy on negotiating a clear agreement between the EU and the U.K.”

Business Secretary Greg Clark said on Monday he made pledges to get Nissan to maintain production in the U.K. The assurances were enough for the Japanese carmaker to commit to producing two new models at its plant in Sunderland, less than a month after Chief Executive Officer Carlos Ghosn said he may make new investment conditional on compensation for any negative consequences of Brexit.

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