Brexit brutal: these nine things happen when the going gets tough

Great Britain has not been a member of the EU since February 1, 2020. In a transition phase until the end of the year, both sides actually wanted to reach a trade agreement. But the negotiations are on the brink. There are only a few days left to achieve a breakthrough so that an agreement can be ratified in time.

Without an agreement there would be massive disruptions in economic activity. An overview of the effects:

Tariffs and import quotas

Great Britain would leave the EU internal market and the customs union on January 1st without any succession. Both sides would then impose tariffs and import quotas. The rules of the World Trade Organization would apply. There would be hefty premiums in a number of sectors: 37.5 percent for UK dairy products, 11.5 percent for clothing, 22 percent for vans and trucks, and 10 percent for automobiles.

Automotive industry

In the event of a no-deal scenario, the European auto industry warns of a dramatic collapse in the mutual trade volume of 110 billion euros over the next five years. For Great Britain this would mean a minus of 52.8 billion euros, for the EU states 57.7 billion euros. Accordingly, the industry sees thousands of jobs at risk.

border controls

With or without an agreement: From January 1st, there will be border controls again. Without an agreement, however, this burden would be significantly higher. According to British Customs, additional bureaucracy would cost businesses on both sides £ 15 billion (€ 16.4 billion) a year. The British government also expects “in the worst scenario” that up to 7,000 trucks could jam in the south-west of England due to controls on the English Channel.

Tourist traffic

Without an agreement, airlines lose their take-off and landing rights. Air traffic would come to a standstill. Because of the serious effects, temporary exemptions are likely. The participants of the EU summit called on the EU Commission in October to prepare “unilateral and limited emergency measures in good time”.

Financial market

In some cases, such emergency rules already exist for the financial sector. Because the City of London is an indispensable financial center for the EU. A hard cut at the beginning of the year could lead to market turbulence. In September, the Commission therefore announced that it would allow British settlement houses for complicated financial products such as derivatives to continue doing business on the EU market until mid-2022.

Northern Ireland

For the British province there is already a fallback solution in the Brexit treaty. Northern Ireland would therefore form a customs union with Great Britain. For goods from outside Europe that could get into the EU, the British authorities have to levy EU duties. Northern Ireland also continues to comply with internal market standards to avoid border controls with Ireland. But it is precisely this solution that Prime Minister Boris Johnson has called into question again with unilateral legislative changes.


Without an agreement, EU fishermen would no longer be allowed to cast their nets in UK waters. This would be a severe blow, especially for the EU countries France, Denmark, Belgium, the Netherlands and Spain. German fishermen, on the other hand, would hardly be affected.

Citizens’ Rights

These are also already regulated in the resignation contract. A good three million people from other EU countries live in Great Britain, and more than a million British people in the EU. You have the right to stay, work, or study. Claims for health insurance, pensions and other social benefits are also guaranteed.

Macroeconomic consequences

The EU repeatedly emphasizes that the macroeconomic impact would hit the British much harder than the continental Europeans. Indeed, UK goods exports to the EU account for 47 percent of total exports. Conversely, it is only eight percent for the EU countries.

According to a study by the research center The United Kingdom in a Changing Europe, leaving without an agreement could in the long term be almost three times as expensive for the British economy as the consequences of the corona pandemic. According to this, Britain’s growth would be 5.7 percent lower over 15 years as a result of the no deal. For Covid-19, it is only 2.1 percent.

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