Brazen assertions by Tory leadership candidates that Europe fears a no-deal as much as the UK, may well be accurate but the stakes are much higher for us than the other 27 countries and they know it, and that is why at the end of the day they will let us self-destruct.
That assertion is made clear by this article in the Independent, in which they report on analysis by the European Commission, which concludes that the UK economy will be hit up to 10 times harder by a no-deal Brexit than the continent’s.
They say that the working assumption in Brussels is bad news for Tory leadership contenders like Boris Johnson, who are hoping to use the threat of a no-deal Brexit as part of their strategy for renegotiating Theresa May’s Brexit deal:
A “state of play” document put out by the commission this week, meant to brief EU leaders, MEPs, and central bankers on the current situation, cites a 2019 estimate by the IMF that the long-term effect on the EU’s GDP by a no deal will be “well below 1 per cent”. The commission says this is “in line with most other studies”.
By contrast, when looking at how the UK fares, the commission cites figures ranging from 3 per cent to 8 per cent for the hit to the UK economy, including the British government’s own 2018 estimate of 7.7 per cent.
“As the commission has constantly stressed, contingency measures can only mitigate the most significant disruptions of a withdrawal without an agreement. While the commission does not speculate on the possible economic implications of different scenarios, it is clear that a withdrawal of the United Kingdom without an agreement would have a serious negative economic impact, and that this impact would be proportionally much greater in the United Kingdom than the EU27 member states,” the document says.
“Preparations by member states and stakeholders are likely to reduce their individual exposure to the negative impact of a withdrawal without an agreement. A high level of preparedness across all sectors of the economy will also mitigate the negative impact.”
The paper says that the economic assumptions are based on the British economy being subject to WTO “most favoured nation” tariffs, which apply to WTO members in the absence of other agreement and comes just days after a leaked UK cabinet paper warned that the UK was not ready for a no-deal Brexit on 31 October, when the current extension of the Article 50 period will expire if it is not extended again.
Isn’t it about time that these realities were accepted by those seeking to enter Number 10 Downing Street in a few week’s time?