An EU single market without Great Britain would cost 0.5 per cent of the EU’s annual economic growth over the next two years. The result European Commission Inquiry Regarding the effects of Brexit. Not less than 0.5 per cent now, but the British are still hard hit. Their GDP (GDP) is expected to grow slowly at 2.25 percent. Thus Brexit will affect the island four times more than the rest of the EU.
This calculation is based on the high costs that companies and states now incur in trade between the EU and Great Britain. So far, everywhere in the EU, a free trade agreement has been in effect. The two states did not impose customs duties on each other’s goods, had no border restrictions, and had very little documentation for trade.
Costs up to 10 percent of the value of the goods
That changed as Britain exited the domestic market on January 1st. The trade deal ended at Christmas, and although it has so far only been used temporarily, many goods have been exempted from customs duties, but bureaucratic effort is on the rise on both sides of the English Channel.
Distributors must now register the delivery of their goods, for example, storage and passage are to be permitted. Although you do not have to pay customs duties, customs now have to check the delivery of goods. In addition, the import may be due to sales tax. These so-called “non-tariff barriers” (NTPs) range from 8.5 to 10.9 percent of the value of goods, depending on the industry, and thus function as efficiently as customs duty.
“Overall, the trade agreement improves the situation compared to the non-agreement situation, but it does not even come close to the interests of EU members,” the EU Commission concludes accordingly. The benefits provided by the hastily knit contract before the start of the year can also be calculated. The Commission estimates that this agreement will reduce the negative impact on the EU by a third and the UK by a quarter, compared to the non-agreement situation.
Economic growth will cost Germany 35 billion
0.5 per cent of GDP averages for all EU countries. The Commission did not further specify this assessment. How much a country is affected by Brexit depends not only on the size of the trade with Great Britain, but also on the nature of the trade. The delivery of goods becomes more expensive as a result of the exit than the exchange of services.
So it is difficult to say how badly Germany has been affected. Assuming an average of 0.5 percent, Brexit would cost German companies 35 35 billion by the end of next year. Across the EU, a 0.5 percent decline in GDP represents 140 billion euros. Although the island’s economy is significantly smaller than the entire EU, the UK scores are almost identical. 2.25 per cent of GDP will be around 110 110 billion by the end of 2022.