Britain's Prime Minister Theresa May Head of the European Commission Jean-Claude Juncker. Photo: Reuters

In its annual report released Wednesday, Germany’s Council of Economic Experts said that Brexit should be prevented if possible, and that if not talks will drag on much longer than the two years stipulated by EU rules.

The group of academics is tasked with advising German policy makers on economic policy.

“Due to the wide-ranging impact of a UK exit from the EU, the council continues to urge that it be prevented,” Bloomberg translated the German-language report as saying. “The economic cost of Brexit will hit the UK significantly harder than the rest of the EU.”

EU President Donald Tusk, as well as Germany and France have all suggested that a move to reverse the Brexit decision would be welcomed. If Britain leaves the bloc, both sides must make efforts to come to an agreement that would minimize the damage, the report said.

UK Prime Minster Theresa May’s government faces an uphill challenge to help accomplish that goal, as time is running out to come to an agreement on a financial settlement demanded by the EU. The Financial Times quoted Mujtaba Rahman of the Eurasia Group as writing, “if there’s no agreement in December, the Article 50 process could prove unsalvageable, absent a change in leadership in the UK.”

But if May, whose administration was hobbled by the failed general election in June which cost her party a majority, overcomes the settlement challenge, another one remains. The question of what the UK-EU relationship will look like has yet to be resolved. Will the UK’s ties to the EU be truly independent such as is the case with Canada, or will they strike a deal like the Norway agreement?

Whichever path the UK follows, multinational companies are already unnerved by the uncertainty seen in the process so far. A group led by Wall Street’s biggest investment banks, for instance, reportedly warned the US Commerce Secretary on Friday that slow progress on Brexit planning may force them to move thousands of jobs out of London.