More German firms to relocate business on Brexit

One out of every eight German companies with business in the U.K. is planning to relocate their investments to other markets because of concerns about Brexit.

Firms with links to Britain are already experiencing less favorable business conditions than they did last year, a survey by the German DIHK industry association showed on Thursday. More than two thirds of respondents expect 2019 to get worse, and 13 percent say they plan to shift toward Germany and other European Union countries because of Brexit.

The results underline the difficulty businesses face in making investment decisions as key details about the U.K.'s exit from the EU remain undecided. British Prime Minister Theresa May is seeking more to secure changes to a Brexit deal she proposed that has so far failed to earn the support of her administration. Only a quarter of the companies surveyed by DIHK claim to be well prepared for Brexit, according to the report. More than half say they can't yet quantify the likely consequences even after a deeper examination of the issues.

Meanwhile, British Prime Minister Theresa May's officials are preparing to compromise on their demands for a re-write of the Brexit agreement, according familiar with the matter.

The U.K. government is watering down its request for changes to the contentious Irish border "backstop" arrangement as set out in the text of the divorce deal that May struck with the European Union last year.

Brexit Secretary Stephen Barclay told the European Union's chief Brexit negotiator, Michel Barnier, during a private meeting Monday that the government is not pursuing a reopening of the withdrawal agreement. That's likely to enrage the pro-Brexit members of May's Conservative Party who say the backstop is unacceptable.

While the stance could help the

to a person premier get concessions from Brussels, it risks making the agreement more difficult to sell to members of Parliament in London.

The EU has consistently rejected the possibility of renegotiating the deal that was struck between the two sides in November, even though U.K. lawmakers last month voted in favor of sending May back to try to do so.

May told members of Parliament after their vote last month there needed to be "significant" and "legally binding" changes to the backstop and that this would necessitate the reopening of the withdrawal agreement.

But after senior EU officials and leaders lined up to rebuff May, Barclay told Barnier the U.K. didn't need the deal to be reopened if it could get the desired result through other means, according to the person with knowledge of the meeting.

A second person with knowledge of the EU's position said the bloc could consider a separate document that could be an annex to the withdrawal agreement that would expand on the backstop arrangement. This could possibly include review clauses and a joint commitment to explore technological alternatives. Under the current agreement, the whole of the U.K. would stay in a customs union with the EU until another solution is acceptable to both sides.