Author(s): Patrick Bisciari
Date published: Jul 2019
SUERF Policy Note, Issue No 84
by Patrick Bisciari, National Bank of Belgium
This note summarises the main findings from a review of a sample of studies on the long-term impact of Brexit on GDP and welfare for both the UK and EU27 economies. Brexit is a lose-lose situation for both the UK and the EU27, but the UK is found to be much more affected by Brexit than the EU27. In an orderly no-deal scenario, the range of losses across the studies is very wide, especially for the UK, reflecting great uncertainty. Small open economies closely related to the UK are worse hit than other EU Member States. This is the case for Ireland due to geographical proximity, for Luxembourg with its economy specialising in financial services, and for Cyprus and Malta as they are Commonwealth countries, followed by the Netherlands and Belgium. A trade agreement could limit the losses from Brexit substantially both for the UK and the EU Member States. This justifies the economic interest for both the UK and the EU Member States to reach and implement a deal on their future relationship.
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