Wednesday

20th Jun 2018

No-deal Brexit could cost €65bn a year

  • London to take 70 percent of the UK's extra costs (Photo: Davide D'Amico)

A no-deal Brexit would cost UK and EU firms £58 billion (€65bn) a year, but the cost could be just £31 billion if the UK stayed in a customs union.

Those were the findings in a flash analysis published by Oliver Wyman, a British consultancy, and Clifford Chance, a law firm, on Monday (11 March).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

  • German car making regions would also feel the pinch (Photo: Kancelaria Premiera)

They said the extra costs would arise from tariff and non-tariff, or regulatory, barriers to trade linked to the imposition of World Trade Organisation rules instead of the EU single market rules in place today.

British firms would face £27 billion of costs and EU27 ones a £31 billion bill in the no-deal scenario, while the split would be £17 billion and £14 billion in the customs union one.

The costs would hit five UK sectors the hardest - chemicals and plastics, metals and mining, aerospace, financial services, and life sciences.

On the EU side, they would affect mostly the aerospace, automative, chemicals and plastics, metals and mining, and life science sectors.

They would be felt mostly keenly in London in the UK and in four German regions with a concentration of automative and manufacturing companies - Bavaria, Baden-Wuerttemberg, North Rhine-Westphalia, and Lower Saxony. They would also be felt keenly in the Irish agricultural sector.

The report warned that even if the UK stayed in a customs union, firms trading in goods would benefit more than those in services, especially financial services, as the customs union does not cover these areas.

It added that small British firms, which have little or no experience of trading outside the EU would suffer the most.

"Small firms that today have no non-EU trade will need to establish and run processes that are entirely new to them," it said.

About 60 percent of British firms with fewer than 10 employees traded exclusively within the EU, it noted, and about 37 percent of those with 10 to 49 employees were in the same boat, it said.

Opinion

No precedents for post-Brexit Irish border

Glib comparisons with the US-Canada border, or municipal boundaries within London, do not stand up to scrutiny - or the reality of an internal Irish border with 275 crossing points in a land beset by 30 years of armed conflict.

EU reforms could turn around Brexit, Blair says

Former British prime minister Tony Blair said the EU should treat Brexit as a 'wake up call' and warned that anxieties which led to the Brexit vote are felt all over Europe.

May promotes Brexit on 'first-anniversary' UK tour

The British prime minister vowed to "deliver a Brexit that unites" the country, while 44 percent of the public thinks her policy is a "total shambles" but that the decision to leave the EU should be respected.

High noon for British PM on Brexit

British MPs are voting on a Brexit bill that could keep the UK in the EU and destabilise the government, as the clock ticks to the exit date.

EU tells UK to stop with Brexit 'fantasies'

After the latest round of Brexit talks, a senior EU official sounded the alarm bell: progress on the key Irish border issue remains elusive, while the London government is chasing pipe dreams.

Visual Data

Mediterranean towns ready for EU-sponsored free wifi

The European Union's fund for free wireless internet connection hotspots is most popular in Belgium, Bulgaria, Croatia, Italy, Malta, Slovenia and Romania. Check if your municipality pre-registered.

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  3. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  4. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  5. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  6. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  7. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  8. Mission of China to the EUChina: Work Together for a Better Globalisation
  9. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  10. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  11. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  12. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network

Join EUobserver

Support quality EU news

Join us