Question

Which would be the consequences for the UK and Europe if the UK were to opt for a no deal Brexit? Discuss.

Answer 1

A no deal Brexit means the UK would leave the European Union (EU) immediately, and there would be no agreements in place about what their relationship would be like in future.

This is not what anybody in Parliament wants, but it's a possible outcome if politicians can't agree on what should happen next.

A no-deal Brexit will inflict substantial economic damage on the UK and the rest of the EU, according to a study that suggests Britain and Ireland will be the hardest-hit countries in such a scenario.

UK alone will suffer income losses of €57bn a year if it leaves the EU without a deal. The rest of the EU will lose €22bn almost half of which will fall on Germany, Europe’s largest economy and a big exporter to the UK.
On a per capita basis, however, Britain and Ireland will probably be the biggest losers by far. UK income is expected to fall by €873 per head, while the equivalent figure for Ireland is €726. The French are estimated to be worse off to the tune of €120 per head, and the Germans by €115.

Economic losses on the UK and the EU sides are expected to be especially intense in regions that are close to the other trading partner. In the UK, for example, regions such as East Anglia, Kent and Essex stand to suffer more than parts of the country further to the north.

A no deal Brexit could lead to a number of things happening. For example:

• Border checks could be re-introduced
• Transport and trade between the UK and the EU could be severely affected
• Adults may not be able to drive in EU countries without a special driving permit
• It could cost more money to use your phone abroad in EU countries
• It would mean no transition period, which is part of the deal that Prime Minister Theresa May is proposing

A no-deal Brexit would mean that there would be no "transition period" to ease the UK out of the bloc and all EU regulations would instantly cease to apply - causing disruption that some economists say could shave at least 2 percent off the gross domestic product (GDP) by the end of 2020.

The UK government would not have to pay an annual 13 billion pounds ($17bn) to the EU budget, but would also lose key subsidies such as the 3 billion pounds ($3.9bn) for farmers under the Common Agricultural Policy.

Overnight, Britain would lose the benefits of the EU's 70 international trade deals, reverting instead to World Trade Organization (WTO) rules governing how it deals with imports and exports.

EU tariffs, VAT and a ban on food of animal origin would confront British exporters with the same obstacles to trade as those facing other non-EU countries.

The prices of some imports, especially fresh vegetables and fruits, could soar by up to 10 percent in British shops and a likely fall in the value of the pound would trigger inflation.

New import controls at borders could disrupt freight traffic as trucks going to and from the EU complete customs declarations, causing bottlenecks on motorways in southern England.