Sunday

11th Apr 2021

Ireland and Luxembourg would be biggest Brexit losers

  • Ireland would be the biggest loser from a Brexit, according to the Bertelsmann-Stiftung think tank (Photo: Dees Chinniah)

Ireland and Luxembourg would be hardest hit economically if the UK decided to leave the EU, according to a new report.

The paper published Monday (27 April) by the German think tank Bertelsmann-Stiftung, looks at three possible scenarios under which the UK could leave the 28 country bloc - a ‘soft exit’ where the UK secures a trade agreement and status comparable to that of Norway and Switzerland; a ‘deep cut’, where it enjoys trading status equivalent to that between the EU and the United States; and ‘isolation’.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Under the best case scenario, the Irish economy would contract by at least 0.8 percent and Luxembourg’s by 0.5 percent, compared to a minimum 0.6 percent loss of output, equivalent to €220 per person, which the UK would incur.

However, Ireland, which is the UK’s largest trading partner, would suffer a 2.7 percent economic hit if the UK were unable to agree an EU trade deal.

The study also assesses how different economic sectors would be affected, concluding that financial services, the largest contributor to the UK economy, would decline by 5 percent.

The chemicals, mechanical engineering and car industry would also see steep losses, with the chemicals industry facing the greatest drop of nearly 11 percent.

More than 50 percent of the UK’s exports go to the EU, while over 50 percent of its imports come from the bloc.

The Bertelsmann paper is the second study this month to suggest that the Irish economy would suffer greater losses than the UK. The uncertainty prompted Irish prime minister Enda Kenny to comment earlier this month that a UK exit from the EU was a “very serious concern” for Ireland.

Shorn of the UK, the EU would see a reduction in real GDP per capita due to lower trade activity with the UK of between 0.1 percent with a ‘soft’ Brexit and around 0.4 percent in case of UK isolation.

The paper adds that cancelling its annual contributions to the EU budget would “represent the UK’s greatest economic benefit from a Brexit”.

To account for lost revenues from the UK coffers, Germany would have to pay in an extra €2.5 billion (gross) per year. France would have to pay an additional €1.9 billion, Italy almost €1.4 billion and Spain around €0.9 billion.

“We are firmly convinced that the combination of economic and political dis- advantages of the UK exiting the EU would be detrimental for everyone involved and must be avoided,” the paper concludes.

“A Brexit is a losing game for everyone in Europe from an economic perspective alone – particularly for the UK,” said Aart de Geus, chairman of Bertelsmann-Stiftung.

Britons will effectively decide whether or not a plebiscite will take place when they go to the polls next Thursday (7 May). David Cameron’s Conservatives have promised to hold an ‘in/out’ referendum by the end of 2017 if they are re-elected, a stance opposed by the opposition Labour party and the Liberal Democrats.

Opinion polls suggest that neither the Conservatives or Labour will be able to form a majority following the elections, raising the prospects of a second successive coalition government.

Exclusive

Four deaths after taking Russian Sputnik V vaccine

Four people recently died after taking Russia's Sputnik V anti-corona jab in previously unreported cases, which are being taken "seriously" by the EU regulator, the European Medicines Agency.

News in Brief

  1. Turkey blames EU for sexist protocol fiasco
  2. France to close elite civil-service academy
  3. Covid-19 cases in UK drop 60%, study finds
  4. White House urges 'calm' after Northern Ireland riots
  5. Italy's Draghi calls Turkey's Erdoğan a 'dictator'
  6. Slovakia told to return Sputnik V amid quality row
  7. EU risks €87bn in stranded fossil fuel assets
  8. Obligatory vaccination not against human rights, European court says

Column

Why Germans understand the EU best

In Germany, there is commotion about a new book in which two journalists describe meetings held during the corona crisis between federal chancellor Angela Merkel, and the 16 prime ministers of its federal constituent states.

Stakeholders' Highlights

  1. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. The Covid bell tolls for eastern Europe's populists
  2. Four deaths after taking Russian Sputnik V vaccine
  3. Post-Brexit riots flare up in Northern Ireland
  4. Advice on AstraZeneca varies across EU, amid blood clot fears
  5. Greenland election could see halt to rare-earth mining
  6. After 50 years, where do Roma rights stand now?
  7. Why Iran desperately wants a new nuclear deal
  8. Does new EU-ACP deal really 'decolonise' aid?

Join EUobserver

Support quality EU news

Join us