- In a tough Brexit all EU countries would have to accept particularly heavy income losses. This is shown by a study by the Bertelsmann Foundation.
- If Britain leaves the EU without a contract, Germany loses income of 9.5 billion euros.
- Particularly affected would be EU regions on the coast of Great Britain; in Germany also areas where there are many medium-sized companies.
If the British leave the EU without a contract, that would hit EU countries too hard. How hard, as a study of the Bertelsmann Foundation, which was published on Thursday, shows that all countries in the EU would lose their income during a so-called hard Brexit.
The biggest exit from the EU would hit the British themselves, the income would shrink by about 2.4 percent. In absolute terms, this means they would have to expect a loss of about 57 billion euros annually. EU countries, which are heavily dependent on trade, come next: Germany would lose about ten billion euros in income per year, followed by France and Italy with about eight and four billion euros.
Researchers Giordano Mion of the University of Sussex and Dominic Ponattu of the Bertelsmann Foundation have calculated in the study how a hard and a soft Brexit could each affect the income development. They have developed a model that takes into account current trade flows and productivity, but also factors such as market size, distance of trading partners and language skills.
In order to assess the complex effects of a Brexit, they have calculated various measures: The large numbers, such as the 57 billion euro loss that threaten Britain, are the absolute change in income. As countries have very different levels of economic performance, the impact of Brexit on each country can be better compared against the relative change in income. Although Germany loses 9.5 billion euros, but this accounts for only about 0.3 percent of income. Belgium loses € 1.7 billion, 0.4 percent.
According to the study, Brexit would have very different regional effects. Regions in North Rhine-Westphalia, for which the trade with Great Britain is important lose the most: Dusseldorf would have to expect a hard Brexit with losses of 650 million euros, Cologne with 560 million euros. This corresponds to income losses of about 0.3 percent each.
EU regions along the coast of Britain will be hit comparatively hard if trade with their neighbors is restricted. Even in regions with many medium-sized companies, such as the surrounding area of Stuttgart or Hamburg, the income would fall significantly.
In both scenarios, a hard and a soft Brexit, there are only losers among the EU countries. The incomes would go down everywhere. However, a soft Brexit would significantly weaken the consequences: for Great Britain and Germany, for example, the losses would be only half as high.
Some countries outside the EU could even benefit from the British exit. The US could expect a good 13, China with five billion euros income growth, should it come to an EU exit without a contract.