‘Everyone loses’ if Britain exits EU

If Britain leaves the European Union, it could knock up to 14% off its GDP by 2030, taking into account all negative factors including lost economic dynamism, a study by two leading German institutes has found.

Based on 2014 values, Britain’s GDP could be €313bn lower — or €4,850 per capita — by 2030 in a worst-case scenario, the study released yesterday by the Bertelsmann Foundation and Ifo economic research institute said.

Under more favourable circumstances, such as Britain forging free trade agreements with the EU from outside the bloc, real per capita GDP could end up between 0.6% and 3% lower, or between €220 to €1,025 per capita.

“The bottom line is that everyone involved would lose economically and politically from the UK leaving the EU,” the study by the two institutes concluded.

“If trade economic, as well as dynamic economic consequences, such as the weakening of both innovative power as well as London as a financial centre, are taken into account together, the GDP losses in the unfavourable scenario could reach 14%.”

The institutes said the extent of the losses for Britain would depend on whether the country is able to reach free trade agreements with Europe once outside the EU; adding that losses for Germany and the rest of the EU would be far less.

Germany’s GDP could lose between 0.3% and 2% per year by 2030, it said, while smaller or peripheral countries sucg as Ireland, Luxembourg, Belgium, Sweden, Malta, and Cyprus stood to suffer more from a “Brexit”.

Reuters