Going through with the plan to remove the EU’s largest economy from the bloc would be devastating for Germany, the country’s chancellor, Olaf Scholz, warned. 

“That would be the biggest destroyer of wealth that could ever happen to Europe and Germany,” he told the German parliament on Wednesday, the Financial Times reported. “Our country has profited more than any other from the EU and [European] cooperation.”

Scholz took the example of Britain in his speech—pointing to how its decision to leave the EU has “plunged the U.K. into economic disaster.”

Germany has a lot hinging on the EU’s single market—whether that’s trade or employment. It’s also the largest consumer of the bloc and a big contributor to its finances. Experts worry that a so-called Dexit would be devastating for German economy, which is already grappling with pressures from high interest rates, slow trade activity, and shrinking output.

Fearing the AfD

The German chancellor’s comments reflect a growing concern about AfD’s gaining support in the lead-up to European Parliament and state elections later this year. The party, which was formed in 2013, is now Germany’s second-most popular political party in national polls, surpassing the three parties that make up Scholz’s coalition. AfD has adopted a hard line against immigration, climate change, and the use of the euro as a currency, among other issues. Last August, the party called the EU a “failed project” and has praised Brexit as a model for Germany to follow. 

Scholz, whose ruling party has been losing popularity in recent times amid lackluster economic performance and a budgetary crisis, said Germany had to fight back against the growing far-right influence in his speech at the Bundestag.  

“With right-wing populism gaining so much support in the U.S., with Brexit plunging the U.K. into economic disaster, with so many governments in Europe being backed by right-wing populists—and sometimes they’re even in the government—then we in Germany have a role, arising from our history, to stop this trend, and to do it together,” he said, the FT reported.

Reining in right-wing influence 

The quest to rein in right-wing influence goes beyond political rivalry. Businesses in Germany have raised concerns about the AfD, too.

Earlier this week, Deutsche Bank CEO Christian Sewing said that right-wing populists “divide society” and lead to “economic decline.”

A group of over 50 German companies have also issued an appeal for mainstream parties to push back against the far right, Bloomberg reported.  

But the tide may be turning. What initially looked like a rapidly growing AfD support base has seen tremors in the past few weeks. Following reports that senior members of AfD were discussing a proposal on mass deportation of immigrants and those with immigrant roots (which the AfD has denied), Germans have taken to the streets to show their opposition. An estimated 1 million people across the nation protested against the far-right extremists, which has been followed by a six-month low in AfD support. The scandal appeared to cost the party a regional election in the state of Thuringia that it had expected to win. 

Critics have floated the idea of banning the AfD—but doing so also comes with fears that if the ban fails, it could make the party even more popular. Last week, a top German court ruled to cancel state funding for an extreme-right party, Politico reported, which has further stirred the debate on actions that can be taken to crack down on the AfD. German President Frank-Walter Steinmeier has called for an “alliance against extremism” to protect democracy and quell right-wing forces.