Study finds Brexit will cost the EU €40 billion annually
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Research by the German think tank Bertelsmann Stiftung has found that hard Brexit will cost EU countries €40 billion annually.
The study was focused on the impact of Brexit on EU incomes. New tariffs after the UK leaves the EU single market would make trade in goods and services very expensive. The study also warns that Brexit could seriously damage the foundations of the world’s largest economic area.
Only China and USA will benefit from Brexit, the study says.
A soft Brexit remains the best desirable scenario: It would reduce the income loss in the entire EU to “only” €22 billion per year.
As a consequence of Brexit, the study found that the UK would face the biggest income loss: €57 billion per year, or €900 per capita.
Germany and France, both export-oriented countries, would lose respectively €10 and €8 billion per year, while Brexit would cost Italians around €4 billion.
The economist Dominic Ponattu of Bertelsmann Stiftung said on the findings of the report that financial services and IT services trade with the UK would be affected and highly productive region, like some Scandinavian hubs, would lose out the most”.
Ponattu conducted the study with Giordano Mion of the University of Sussex.
In the UK, the London region alone would be hit hardest by a hard Brexit, with a loss of €5 billion per year.
Ireland, which has been at the centre of the Brexit negotiations between the EU and the UK, will suffer in a no-deal scenario: the country could face a welfare loss of €3.5 billion per year with a hard Brexit. In Germany, the cities of Düsseldorf (€650 million) and Cologne (€560 million) would be affected the most.
Outside Europe, there are countries and continents ready to toast to the UK’s exit from the EU: US incomes could rise by around €13 billion annually in a hard Brexit situation. In China, annual income would rise by around €5 billion, and in Russia such a scenario would lead to a slight increase of around €260 million annually, according to the analysis.
In China, income would rise by around €5 billion, and in Russia such a scenario would lead to a slight increase of around €260 million annually, according to the analysis.
