Wednesday, August 10, 2022

Brexit to hit German incomes – US, China, Russia to profit — Study

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Germany’s income is set to take a big hit from Brexit, irrespective of the form the British withdrawal from the EU finally takes, according to a study published on Thursday by Germany’s Bertelsmann Foundation.

A so-called “hard Brexit’’ without an agreed deal would mean a decline in annual income for Germany of almost 10 billion euros (11.5 billion dollars) a year, equivalent to 115 euros per inhabitant, the study found.

Following Britain itself, Germany would be the country worst hit, followed by France and Italy.

Britain would lose an annual 57 billion euros, equivalent to 875 euros per inhabitant.

The loss to France would be 8 billion euros a year and to Italy 4 billion euros.

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A negotiated Brexit would significantly alleviate the negative effects, the study found.

It attributed the losses to customs tariffs and reduced competitiveness in the EU with negative consequences for prices and wages.

Dominic Ponattu, one of the authors, noted that while 10 billion euros was a large figure, it amounted to just 0.3 per cent of German GDP.

The U.S. and China would see rises in GDP amounting to billions of euros, and Russia would also benefit, although to a lesser extent, Ponattu found.

Ponattu of the Bertelsmann Foundation worked along with Giordano Mion of the University of Sussex on the study, published in English under the title “Estimating the impact of Brexit on European countries and regions.”

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