‘Britain, Brexit could be your Waterloo!’ That is what the French newspaper Le Monde told the UK in their editorial on 18 June, the day the battle of Waterloo took place 200 years ago. Leaving the EU could cost the UK 300 billion euro, research shows. Other EU members would also lose economically and politically from a potential Brexit, but the loss for the UK would be considerably bigger.
The German think thank Bertelsmann Stiftung and the ifo Institute in Munich conducted a research on the consequences of a possible Brexit for the UK and for Europe. They looked at three possible scenarios for the UK after the country would exit the EU, a ‘soft exit’ where the UK would have a similar status as Switzerland or Norway with a trade agreement with the EU, a ‘deep cut’ where there is no trade agreement and ‘isolation’ by which the UK will lose all its privileges from the trade agreements the EU has made with other countries.
Depending on the scenario the UK’s real GDP per capita will be between 0.6% and 3% lower in 2030 than if the country would have stayed within the EU. The study stated that savings, including those previously reserved for EU budget payments, would not be able to compensate for the losses the country would face.
The British industries will face different consequences due to the increased costs of the trade between the UK and the EU. The financial sector, for example, might see a 5% loss in the worst case scenario. The chemicals industry will encounter the greatest damage, with an 11% decrease, according to the study.
Not only the UK, but all EU member states will feel the consequences of a Brexit, the research states. The lower trade activity with the UK will result in a lower real GDP per capita, the think tank calculated. Ireland would be hit hardest with an income loss between 0.8 and 2.7%, followed by Luxembourg and Belgium. Apart from that, the member states will also have to fill the gap of UK’s EU contributions. Germany will have to pay 2.5 billion euro extra, Bertelsmann Stiftung said.
Aart de Geus, chairman of the think tank, stated that a ‘Brexit is a losing game for everyone in Europe from an economic perspective alone – particularly for the UK’. He added that “aside from the economic consequences, it would be an especially bitter setback for European integration as well as Europe’s role in the world”. Le Monde warns the UK for isolation. “Messieurs les Anglais, don’t let the sirens of a fake independence pull you away from the continent. Just as in 1815, your future is in Europe.” The next move is in the hands of the UK.