{ "title": "The Long-Term Impact of Brexit on the European Union", "publication": "IMF Blog, August 10, 2018", "sourceUrl": "https://www.imf.org/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu", "canonical": "https://www.imf.org/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu", "overlayPath": "/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/index.md", "summary": "Authors: Jiaqian Chen, Christian Ebeke, Li Lin, Haonan Qu, Jesse Siminitz", "sections": [ { "heading": "Overview", "content": "- Authors: Jiaqian Chen, Christian Ebeke, Li Lin, Haonan Qu, Jesse Siminitz\n- Publication date: August 10, 2018\n- Core message: Reversing deep EU–UK economic integration will reduce long-term output and employment in the EU-27; the magnitude depends on the final post-Brexit relationship." }, { "heading": "Channels of EU–UK integration highlighted", "content": "- Trade:\n - The U.K. accounts for about 13 percent of the EU-27’s trade in goods and services.\n - Substantial supply chain trade links between the EU-27 and the U.K. involve several countries.\n- Capital flows:\n - Gross bilateral capital flows totaled around 52 percent of EU-27 GDP in 2016.\n- Migration:\n - Migration flows have grown over time and are very large for some countries, such as Ireland.\n- Composite indicator:\n - A constructed index capturing all these channels indicates growing EU–UK bilateral integration over the past 30 years." }, { "heading": "Aggregate long-term impact under alternative scenarios", "content": "- FTA (standard free trade agreement: low tariffs on goods but higher non-tariff barriers):\n - EU-27 real output: lower by 0.8 percent in the long run relative to a no-Brexit scenario.\n - EU-27 employment: lower by 0.3 percent in the long run relative to a no-Brexit scenario.\n- WTO rules (default to World Trade Organization rules):\n - EU-27 real output: lower by 1.5 percent in the long run relative to a no-Brexit scenario.\n - EU-27 employment: lower by 0.7 percent in the long run relative to a no-Brexit scenario.\n- “Norway” (EEA) scenario (access to the single market preserved; membership in the customs union lost):\n - Decline in output and employment for the EU-27: appears negligible." }, { "heading": "Country-by-country estimates from trade-channel model", "content": "- Model scope: country-specific framework capturing direct and indirect trade effects from higher tariffs and non-tariff barriers for goods and services. Results are relatively smaller than aggregate estimates because only trade links are modeled.\n- FTA scenario (long run, relative to no-Brexit):\n - EU-27 real output: lower by 0.2 percent.\n - Largest country hit: Ireland — about 2.5 percent lower compared to the no-Brexit scenario.\n - Other notably affected countries: the Netherlands, Denmark, Belgium, and Czech Republic (ranked after Ireland by size of impact).\n- WTO rules scenario (long run, relative to no-Brexit):\n - EU-27 real output: lower by 0.5 percent.\n - Ireland: output loss of 4 percent given substantial increases in both tariff and non-tariff barriers." }, { "heading": "Scope and limitations noted by the study", "content": "- Focus: the study focuses entirely on the long-term impact after full adjustment to the new relationship.\n- Exclusions:\n - The study does not analyze the effect of uncertainty about the future relationship between the EU-27 and the U.K.\n - The study does not analyze the transitional dynamics during the move to the new relationship.\n- Timing: The ultimate consequences will take years to materialize and will depend on the eventual deal between the EU-27 and the U.K.\n\nSource: The Long-Term Impact of Brexit on the European Union, August 10, 2018\n\n---\n\n Content in this bundle\n\n- Country Report\n - Country Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Country Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Português\n- https://www.imf.org/wp-content/uploads/2018/08/BLOG-1024x600-EUR-blog-containor-exports-ships-Gerard-Bottino-Crowd-spark-Newscom-nzphotos080635.jpg\n- https://www.imf.org/wp-content/uploads/2018/08/eng-august-1-brexit2-1.png\n- https://www.imf.org/wp-content/uploads/2018/08/eng-august-1-brexit3-2.png\n- UK economy must get more efficient\n- UK Article IV\n- UK and the IMF\n- Brexit and the city\n\nSource: https://www.imf.org/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu" } ], "bullets": [ "[Markdown version](/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/index.md)", "[Structured JSON version](/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/index.json)", "[Bundle manifest](/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/bundle-manifest.json)", "Authors: Jiaqian Chen, Christian Ebeke, Li Lin, Haonan Qu, Jesse Siminitz", "Published: August 10, 2018", "Authors: Jiaqian Chen, Christian Ebeke, Li Lin, Haonan Qu, Jesse Siminitz", "Publication date: August 10, 2018", "Core message: Reversing deep EU–UK economic integration will reduce long-term output and employment in the EU-27; the magnitude depends on the final post-Brexit relationship.", "Trade:", "Capital flows:", "Migration:", "Composite indicator:", "FTA (standard free trade agreement: low tariffs on goods but higher non-tariff barriers):", "WTO rules (default to World Trade Organization rules):", "“Norway” (EEA) scenario (access to the single market preserved; membership in the customs union lost):", "Model scope: country-specific framework capturing direct and indirect trade effects from higher tariffs and non-tariff barriers for goods and services. Results are relatively smaller than aggregate estimates because only trade links are modeled.", "FTA scenario (long run, relative to no-Brexit):", "WTO rules scenario (long run, relative to no-Brexit):", "Focus: the study focuses entirely on the long-term impact after full adjustment to the new relationship.", "Exclusions:", "Timing: The ultimate consequences will take years to materialize and will depend on the eventual deal between the EU-27 and the U.K.", "**Country Report**", "[Português](https://www.imf.org/pt/News/Articles/2018/08/09/blog-the-long-term-impact-of-brexit-on-the-eu)", "[https://www.imf.org/wp-content/uploads/2018/08/BLOG-1024x600-EUR-blog-containor-exports-ships-Gerard-Bottino-Crowd-spark-Newscom-nzphotos080635.jpg](https://www.imf.org/wp-content/uploads/2018/08/BLOG-1024x600-EUR-blog-containor-exports-ships-Gerard-Bottino-Crowd-spark-Newscom-nzphotos080635.jpg)", "[https://www.imf.org/wp-content/uploads/2018/08/eng-august-1-brexit2-1.png](https://www.imf.org/wp-content/uploads/2018/08/eng-august-1-brexit2-1.png)", "[https://www.imf.org/wp-content/uploads/2018/08/eng-august-1-brexit3-2.png](https://www.imf.org/wp-content/uploads/2018/08/eng-august-1-brexit3-2.png)", "[UK economy must get more efficient](http://www.imf.org/en/News/Articles/2018/02/08/na021418-uk-economy-must-get-more-efficient)", "[UK Article IV](http://www.imf.org/en/Publications/CR/Issues/2018/02/13/United-Kingdom-2017-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-45627)", "[UK and the IMF](http://www.imf.org/en/Countries/GBR)", "[Brexit and the city](https://blogs.imf.org/2017/05/29/chart-of-the-week-brexit-and-the-city/)" ], "related": [ { "title": "Country Report", "role": "report", "sourceUrl": "https://www.imf.org/-/media/files/publications/cr/2018/cr18224.pdf", "summary": { "path": "/-/media/files/publications/cr/2018/cr18224.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/cr/2018/cr18224.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/index.md", "json": "/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/index.json", "bundleManifest": "/en/blogs/articles/2018/08/10/blog-the-long-term-impact-of-brexit-on-the-eu/bundle-manifest.json" }, "generatedAtUtc": "2026-08-27T18:42:57.309Z" }