Frankfurt am Main, Oct 2 (AFP/APP):Britain quitting the European Union without a deal on October 31 would deal a harsh blow to Germany’s already stuttering economy in 2020, leading think-tanks said in Berlin Wednesday.
“For the coming year, we should reckon with a deduction of 0.4 percentage points” in growth if Britain crashes out, experts from five leading economic institutes said in a joint statement.
By contrast, “if Britain’s future relationship with the EU is reliably clarified, there should be a swift brightening of economic prospects,” they added.
A no-deal Brexit would create new barriers at UK-EU borders as both sides are legally required to levy tariffs and check goods for regulatory compliance, while trade in some services could be stopped or hindered.
Combined with a fall in the pound and massively increased uncertainty over future economic relationships undermining business investment and consumer spending, British demand for imports would fall.
That would have direct and indirect effects on the biggest manufacturing economies in the 19-nation eurozone.