Saturday , December 16 2017
Home / IFO Hans-Werner Sinn & Clemens Fuest / New Study: Brexit Brings Billions in Losses All Round

New Study: Brexit Brings Billions in Losses All Round

Summary:
Rising trade costs in both Britain and the other 27 EU countries mean that Brexit will cause considerable economic damage. In Britain this damage will exceed any savings made on its net contribution to the EU budget. If future trade were to be conducted on the basis of WTO rules, this would still cost Britain an annual 16 billion euros, even if it were to pay nothing into the EU budget. For the EU, the losses generated by the absence of a net contribution from Britain and rising trade costs amounts to around 44 billion euros per year. “Everyone stands to lose out from Brexit,” said ifo President Clemens Fuest citing a paper published by the European research network EconPol, which is coordinated by the ifo Institute. “A free

Topics:
Clemens Fuest considers the following as important:

This could be interesting, too:

Clemens Fuest writes ifo Dresden Newsletter 15 December 2017

Clemens Fuest writes ifo Sharply Increases Growth Forecast for 2018 to 2.6 Percent

Clemens Fuest writes ifo Warns of Drastic Drop in Regional Subsidies in Germany

Clemens Fuest writes Fuest Calls for Free Trade with Britain

Rising trade costs in both Britain and the other 27 EU countries mean that Brexit will cause considerable economic damage. In Britain this damage will exceed any savings made on its net contribution to the EU budget. If future trade were to be conducted on the basis of WTO rules, this would still cost Britain an annual 16 billion euros, even if it were to pay nothing into the EU budget. For the EU, the losses generated by the absence of a net contribution from Britain and rising trade costs amounts to around 44 billion euros per year. “Everyone stands to lose out from Brexit,” said ifo President Clemens Fuest citing a paper published by the European research network EconPol, which is coordinated by the ifo Institute.

“A free trade agreement could more than halve the additional costs arising from constraints on trade,” added Fuest. The EU’s total losses would drop to 27 billion euros, while for Britain its savings on contributing to the EU budget would more or less offset rising trade costs. “Negotiations consequently need to focus on minimising economic losses through trade barriers and a comprehensive free trade agreement,” noted Fuest.

  1. Felbermayr, Gabriel, Clemens Fuest, Jasmin Katrin Gröschl and Daniel Stöhlker, "Economic Effects of Brexit on the European Economy", EconPol Policy Report 4, 2017 | Details | PDF Download

Clemens Fuest

Clemens Fuest took over from Hans Werner Sinn as chairman of the IFO Institute in April 2016. He is professor at the Faculty of Economics of the University of Munich.

Leave a Reply

Your email address will not be published. Required fields are marked *