Updated November 25, 2020, 11:20 a.m.
- Negotiations on EU-UK relations are proving difficult.
- If both sides cannot agree on a deal, lower incomes and higher unemployment threaten.
- The difficult situation in his country could force Prime Minister Boris Johnson to make concessions.
Stay with the negotiating partners around six weeks: The European Union and its ex-member Great Britain have to agree on an agreement by December 31, 2020. Otherwise the Transition phase with a unregulated Brexit end – and with far-reaching consequences.
Brussels and London are still far apart on key issues. A finished agreement would also have to be in good time translated and from all EU member states ratified will.
“Time is running out,” wrote EU chief negotiator Michel Barnier recently on twitter. “Fundamental differences persist, but we’re working hard on a deal.”
Less trade, less income, fewer jobs
What is clear is that both the UK and the EU would be hard hit if they did not reach an agreement. Both sides would have to duties could raise long waiting times at the borders Delivery bottlenecks as a result, trade between countries would likely decline.
“The UK will turn into a 2021 deal without a deal recession fall and should get a stagflation problem in the medium term, “explains Paul Welfens, Professor of Economics at the Bergische Universität Wuppertal, in conversation with our editorial team. With Stagflation is a Combination of stagnating real income and inflation meant.
The possible ones are difficult to put into numbers political consequences: In the Europe-friendly Scotland has left the EU the desire for state independence Given a boost. After a hard Brexit, there should be a solid line between Northern Ireland and the Republic of Ireland, many experts believe that the laboriously worked peace there would be in danger.
Unregulated Brexit would also have consequences for the EU and Germany
The European side would probably get off lightly. However, an unregulated Brexit would also have consequences for Germany and the other EU countries. Paul Welfens expects the German exports to the kingdom without a deal in the next two years decrease by 10 percent will. “That would be a quarter of a percentage point of national income loss.”
It should not be forgotten that a no-deal Brexit would also hit the neighboring countries of the Netherlands and Belgium hard – which in turn are important trading partners for Germany.
A study commissioned by the Federal Ministry of Economics comes to the conclusion that 103,000 jobs in Germany would be affected by a hard Brexit. The Bertelsmann Foundation has calculated that Income per capita of Germans could decrease by 115 euros per year. However, the decline in income would be particularly large for the British themselves (900 euros per person per year).
The biggest points of contention
There is a problem with the negotiations on the one hand fishing: So far, EU members have had largely free access to British waters. Fleets from France, Belgium and the Netherlands in particular continue to rely on it. British companies, on the other hand, want the British fish to be theirs: so far, foreign fleets have fetched more fish from British waters than the British themselves.
Another controversial term is “level playing field”what about level playing field translate. The EU only wants to agree to free trade with the UK if there are comparable social and environmental standards. The British, on the other hand, want to set these rules themselves.
Agreement still possible
In October, Boris Johnson made it clear that he did not want to change his stance. Speaking of the negotiating partners in Brussels, he said in a speech: “You are calling for the possibility of controlling the freedom of our legislation and our fishing in a way that which is unacceptable to any independent country would be. “As a success he could Free trade agreements book that his government with Japan and Canada has negotiated.
Still, Johnson is in a difficult position: a hoped-for one Free trade agreement with the USA is due to the change in the presidency in far distance. “In any case, Joe Biden will not make it as easy for Johnson as Donald Trump would have expected,” says Paul Welfens.
Cummings departure as a sign?
The UK has through the Corona-Pandemie in addition to digesting a severe economic shock – the economic consequences of Brexit would add to that. “The pressure on Johnson is maximum. Because of the massive Corona economic crisis, he should be at the end of the year but looking for a deal with the EU.“
In mid-November, the British prime minister parted ways with his controversial advisor and Brexit hardliner Dominic Cummings. The move is seen as a sign that Johnson wants to say goodbye to his confrontational course in domestic and foreign policy.
Expert Welfens believes that Johnson ultimately depends on agreeing to a deal. There’ll probably be at least one Last minute deals give to get a longer transition period for further negotiations.
Von der Leyen: “Will do everything possible to reach an agreement”
The EU also continues to hope for an agreement. After difficult weeks we are now making greater progress, said Commission President Ursula von der Leyen at a press conference last week.
On Wednesday in the European Parliament, however, von der Leyen said: “I still cannot tell you today whether there will be an agreement in the end.” The next few days would be decisive.
There is still very serious differences. “With very little time left to go, we’ll do everything in our power to reach an agreement,” said von der Leyen. “We are ready to be creative. But we are not ready to question the existence of our internal market.”
EU more popular than ever in the UK
In Brussels, a representative survey by the Pew Research Center should also have caused satisfaction: Say in it 60 percent of the British surveyed that they are a positive opinion of the European Union have a historical high and an increase of six percentage points over the previous year. The apparently contributed to this Evaluation of the corona crisis management: Only 46 percent of Britons think their own government is doing a good job dealing with the pandemic. The EU, on the other hand, gave 64 percent good marks on the subject.
Economist Paul Welfens, however, does not believe that the EU can rest on such numbers: the member states should have theirs Strengthen cooperation. If this is not possible with all states due to the current blockade policy of Poland and Hungary, then at least on the basis of the euro states: with parliament, government and budget for the euro zone. “The EU and the Eurozone need to be able to act, since the further economic rise of China is foreseeable and the USA can be expected to be politically weakened for years.”
About the expert:
Prof. Dr. Paul JJ Welfens is President of the European Institute for International Economic Relations at the Bergische Universität Wuppertal. The expert on economic integration and the global economy is the author of the book “Brexit by mistake” (Springer-Verlag).
- Conversation with Prof. Dr. Paul JJ Welfens
- Deutschlandfunk.de: Negotiations fish
- German Press Agency (dpa)
- Europäische Kommission: Speech by Michel Barnier in plenary session of the European Parliament
- Leibniz Institute for Economic Research Halle / DIW Berlin: Short-term economic effects of a “Brexit” on the German economy
- Pew Research Center: Majorities in the European Union Have Favorable Views of the Bloc
- The Guardian: Brexit deal close to being finalised, EU ambassadors told
British Prime Minister Boris Johnson has tested positive for the coronavirus. Since his symptoms have persisted for many days, he has now been taken to a hospital.