Brexit and After by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9789811579691
Publisher: Springer Singapore

4 Brexit and the Economy

Brexit is a reality since 31 January 2020. All the involved parties, the UK and the EU, and their deputed organs had approved the deal and the decision entered into force. Yet the particulars remained to be settled: a host of agreements have still to be worked out, let alone agreed on. The future will depend on the type of relations the two parties will agree on, perhaps in 2020. The alternatives are (1) a full UK participation in the single European market with conditions and (2) no deal, which means governing bilateral trade relations with WTO rules. At the time of writing (April 2020), the decision is in limbo due to the health pandemic.

In the interim, Great Britain has to follow EU rules, including paying a fee for the financial settlement foreseen in the Withdrawal Agreement, and get permissions in case of extraordinary policy measures such as those needed to fight the economic consequences of Covid-19. In exchange, the UK continues to enjoy EU support—although it is a net contributor to the EU budget. Hard times occasioned by Brexit itself have complicated smooth transitions in trade and labor relations, and allow the United States to fish in troubled waters. The Covid-19 pandemic which hit the UK and various EU member countries hard is exacerbating the situation. The pandemic slowed down the ongoing EU–UK negotiations and added uncertainty to an already blurred future. Economic forecasts are worsening, and financial strain is growing (Chart 2 and Table 1).

Chart 2OECD interim economic outlook forecasts, 2 March 2020, real GDP growth, year-on-year % change.

Source Own elaboration based on OECD interim economic assessment, Coronavirus: The world economy at risk, 2 March 2020, p. 2 (https://​www.​oecd-ilibrary.​org/​economics/​oecd-economic-outlook/​volume-2019/​issue-2_​7969896b-en)

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