We spin merrily round in the Brexit merry-go-round. For what the price is, however, uncertain. In particular, the economic misfällt this planning uncertainty. The result is that investment.
Will there soon be a new Brexit Deal? Maybe, maybe not. Who’s to know? “Although the conduct of great Britain is extremely annoying, it is now on the European side to bite on the teeth and not to lose patience,” says the President of the foreign trade Association BGA, Holger Bing man.
While one or the other of Brexit-travel quite gradually dizzy is likely to be, calls for the BGA to take a long breath. A chaotic Brexit, without the agreement, the worst of all possible variants, so Bing man would finally.
So far, the Brexit for the 31’s. October planned. But the British house of Commons to the renegotiation of the contract with the EU would have to agree this week.
Brexit: And another round!?
However, the British Parliament voted on Saturday (19.10.2019) surprisingly about the Brexit Treaty. The deputies voted instead for a resolution on the postponement of the vote. It is the end of October, a Chaos-Brexit, with all its economic turmoil, is at least somewhat less likely.
In addition, EU Council President, Donald Tusk, has the preservation of the British request for a postponement of the Brexit-date on the 31. October is also confirmed. Now he will discuss with the EU leaders about how to respond to it. An EU representative said, the actual application had not been by the British Prime Minister Boris Johnson signed.
Boris Johnson had agreed a few days ago, after a long dispute with the EU to invoke the exit of the Treaty, which was immediately endorsed by the EU heads of state and heads of government. Re the question of how the border between the EU-state of Ireland and British Northern Ireland, even after the Brexit to remain open has been resolved. In addition, Johnson with Brussels agreed in a political Declaration that there should be in the longer term only a loose commitment of his country to the EU.
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Brexit – delay Yes or no?
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Brexit and no end – Extension in two letters
“Paralyzing State Of Limbo”
Holger Bing man warned of further damage to the economy. “It is incredible what the British expect of your European partners,” said Bing man compared to the “Rheinische Post” on Monday (21.10.2019). “The companies on both sides of the English channel, hanging in the air and still do not know when and how you have to make your customs and trade processes in the future.”
The British are going kept Europe continued and strained the patience of their European friends again. “Victims are once more the people, but, of course, the company. Because of the debilitating state of suspension is extended with its negative impact on the economy on both sides of the channel.”
Brexit vote: On uncertainty attitude follows back
These consequences are confirmed by a recent study by the German Institute for economic research (DIW), 18. October. “The continuing uncertainty burdened the German economy”, is part of the largest German economic research Institute. The result is restraint, particularly with regard to investments.
Calculations of the DIW pointed out that the economic growth in Germany, due to the uncertainty since the Referendum to an average of 0.2 percentage points per year lower than it would have been without the Brexit-the decision of the case. Overall, the decline in Growth amounts to around 0.8 percentage points since June of 2016 – and the trend: continued.
This is not surprising. Already in 2016, the DIW predicted: “The effects are likely to persist beyond the short term, since the negotiations on the withdrawal from the European Union over several years are likely to be protracted.” Therefore, a slower Investment growth and a weaker employment trend could be expected.
“Getting ready for Brexit” is associated primarily with uncertainty
And further, it was said, that would make these developments in the Euro area is noticeable. “However, trade effects are likely to play an important role; the weaker UK demand dampens exports from the Euro area. The devaluation of the British pound will strengthen this decline, since in the course of its imports become more expensive from a British perspective. The higher uncertainty in the Euro area is likely to increase the cost of financing and investment activity in addition to affect,” predicts the DIW.
Basically, the uncertainty in three dimensions, said at the time, Ferdinand Fichtner, head of the Department of forecasting and economic policy at DIW Berlin: “We do not know neither when the withdrawal is made, but we also know the conditions under which the withdrawal is made, and even if we knew precisely, it would be for the company, but also for us economic researchers is difficult to assess what the consequences of the new relationship between the EU and the United Kingdom has actually. In this respect, there is uncertainty in a lot of ways.”
Brexit: What would happen if…?!
Current state is: Should it come to apply a non-Brexit, was fall back the United Kingdom for the EU in mutual trade relations to the Status of a Third country. “This is likely to be immediate restrictions on the free movement on the labour market and of the-, services – and capital movements between the United Kingdom and the EU,” – reads from the DIW. Especially the impaired transport of goods is likely to weigh on the German economy then.
According to DIW calculations, the GDP would be in the case of a hard-Brexit the end of October, growth rates in Germany in the year 2020 to 0.4 and in the year 2021, 0.3 percentage points lower than in the case of a regulated Brexit with the transition phase. A disorderly Brexit would hit the German economy especially in the coming year, the negative effect on the German economy is likely to subside from the first half of the year 2021 gradually.
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Economy syringe in sight?
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Economy syringe in sight?
A soft Brexit would dampen the loss of income to the extreme, such as a study by the Bertelsmann Foundation has revealed that Germany would have to be set in case of No-Deal-Brexit on the loss of income in the amount of around ten billion euros per year, in the event of a Brexit, under contractual terms and conditions would be cut in half these losses of five billion euros.
However, the UK would benefit from it the most: In the case of a hard-Brexit the UK would have to expect according to the study, with a loss of Income of 57 billion Euro per year. In the case of a soft Brexit, the loss would be about 32 billion euros, is also considerably lower.
There are also winners!
But there are also countries outside Europe – which can really benefit from Brexit. According to the Bertelsmann study, the U.S. would be able to increase income in a tough Brexit around 13 billion euros a year. In China, the income would rise to around five billion euros annually, in Russia, one could expect a slight increase in the amount of around 260 million euros a year.
The statement by the study authors: “From Brexit affected European value chains negatively. As a result, trade within Europe would be more expensive and the economic relations with the Rest of the world more attractive,” says Dominic Ponattu, economic expert of the Bertelsmann Foundation.