The possibility the UK might leave the European Union infamously known as Brexit– is a major source of concern. The probability of the UK leaving the EU significantly rose after the referendum on 23. June 2016. This Bachelor Thesis seeks to assess the macroeconomic consequences of Brexit on the UK’s, Germany’s and other major european country’s economies. Despite the heaviest awareness that it is difficult to properly quantify the costs of uncertainty over Brexit, this work provides evidence that the severity of Brexit’ impact was not uniform across the investigated countries. The first part will elaborate the juristic consequences of the referendum and the potential resulting scenarios, while the second part will present the various options Britain has outside of the EU. The last big block will focus on the consequences of the Brexit for the UK, Germany and the rest of the EU.
Table of Contents
1. Introduction
2. State of Research
3. The History of Brexit
4. Juristic consequences of the Referendum
5. Scenarios
5.1 Best Case Scenario
5.2 Most Probable Scenario
5.3 Worst Case Scenario
6. Possible Options for Britain after the Brexit
6.1 The UK remains within the existing treaties
6.2 The UK remains following a treaty change
6.3 The Norwegian Model [EEA & EFTA]
6.4 The Swiss Model [Bilateral Treaties & EFTA]
6.5 The Turkish Model [EUCU]
6.6 Free trade respectively association agreement
6.7 A more international approach [USA/Canada/WTO]
6.7.1 Unilateral adoption of WTO governed trade
6.7.2 Transatlantic Free Trade [TTIP]
6.7.3 Free Trade among the Commonwealth countries
7. Consequences for Britain
7.1 Quantifiable Consequences
7.2 Not quantifiable Consequences
7.3 Consequences in the short term
7.4 Consequences in the long term
8. Consequences for affiliated nations and territories
8.1 Consequences for Scotland
8.2 Consequences for Gibraltar
8.3 Consequences for (Northern-) Ireland
9. Consequences for the Rest European Union
10. Consequences for Germany
11. Outlook: Grexit and other potential exit candidates
12. Conclusion
Annex
A GDP of EU-28 and selected member countries
B Percentage of foreign nationals in the EU
C GDP/EUR exchange rate over the last six month
Objectives and Research Themes
This thesis aims to neutrally assess the macroeconomic consequences of the UK's exit from the European Union (Brexit). It examines the implications of various potential exit scenarios for the UK, Germany, and the broader EU, focusing on economic, political, and juristic challenges arising from such a withdrawal.
- Analysis of the historical and juristic background of the EU referendum.
- Evaluation of potential future relationship models between the UK and the EU.
- Quantification of potential economic impacts, including trade, investment, and GDP changes.
- Examination of specific consequences for affiliated territories and key EU member states.
Auszug aus dem Buch
1.1 Best Case Scenario
The Institute of Economic Affairs (IEA) Brexit prize winner Iain Mansfield (2014) suggested in his winning entry “A blueprint for Britain – Openness not Isolation” that in a best case scenario, the UK would negotiate a positive exit agreement with the EU. Major goals would be the securing of EFTA access, including some concessions for agriculture and access for significant service exports in exchange for accepting half or less of the acquis. Undiminished trade access and a reduction of the EU regulatory burden would cause exports to boom.
Securing a range of new agreements with major and minor external trading partners including the BRICS states Brazil, Russia, India, China, South Africa and Australia would also grow Britain’s exports. Trading partners inside the EU would maintain their FTAs with the UK, some with minor amendments. Taking the reduction of the regulatory burden and a competitive tax environment into account, a rise in FDI would more than compensate the Brexit. Mansfield estimates the total impact on GDP at 1,1 %.
Summary of Chapters
1. Introduction: Presents the context of the 2016 Brexit referendum and outlines the research objective to provide a neutral assessment of the potential macroeconomic ramifications.
2. State of Research: Reviews existing academic literature and forecasts regarding Brexit, highlighting the overall consensus that a withdrawal would negatively impact both the UK and EU economies.
3. The History of Brexit: Traces the tense historical relationship between the UK and the EU since 1973, including key political statements leading up to the referendum.
4. Juristic consequences of the Referendum: Analyzes the legal framework of Article 50 TEU and the procedural uncertainties surrounding the withdrawal process.
5. Scenarios: Outlines three distinct models for Brexit—Best Case, Most Probable, and Worst Case—as established by Iain Mansfield.
6. Possible Options for Britain after the Brexit: Explores various post-Brexit relationship models, such as the Norwegian or Swiss models, and alternative international trade approaches.
7. Consequences for Britain: Categorizes the economic impacts into quantifiable and non-quantifiable effects, distinguishing between short-term shocks and long-term structural changes.
8. Consequences for affiliated nations and territories: Investigates the specific challenges faced by Scotland, Gibraltar, and Northern Ireland in the event of an exit.
9. Consequences for the Rest European Union: Discusses the anticipated negative but less severe impacts on the remaining EU member states compared to the UK.
10. Consequences for Germany: Examines the potential risks to German industry, finance, and investment, as well as the impact on German firms currently operating in the UK.
11. Outlook: Grexit and other potential exit candidates: Analyzes growing Euroscepticism in other EU member states and the potential for further political fragmentation within the union.
12. Conclusion: Synthesizes the findings, emphasizing the complexity of the economic fallout and the need for careful negotiation to mitigate long-term damage.
Key Keywords
Brexit, European Union, United Kingdom, Macroeconomics, Uncertainty, Single Market, EEA, EFTA, Trade Policy, Foreign Direct Investment, GDP, Referendum, Sovereignty, Economic Integration, Financial Services
Frequently Asked Questions
What is the core focus of this thesis?
The work provides a comprehensive, neutral assessment of the macroeconomic consequences of the UK withdrawing from the European Union.
What are the primary thematic areas covered?
The thesis covers the historical context of the Brexit vote, legal withdrawal mechanisms, various post-Brexit relationship scenarios, and specific economic impacts on the UK, Germany, and the broader EU.
What is the main research objective?
The goal is to determine what a Brexit would mean for freedom, market economy, subsidiarity, and competition within the UK and its partners.
What scientific methodology is applied?
The research relies on a critical review of existing economic literature, forecasts, official government publications, and quantitative data provided by institutions like the OECD and HM Treasury.
Which topics dominate the main section of the work?
The main section details the legal procedures for leaving (Article 50), economic scenarios (Best vs. Worst case), and the long-term consequences for trade, investment, and labour markets.
Which keywords best describe this study?
The core keywords include Brexit, EU, UK, macroeconomic consequences, uncertainty, Single Market, EEA, EFTA, and FDI.
How does the author evaluate the "reverse Greenland" model for Scotland?
The author discusses it as a potential, albeit politically complex, arrangement that could allow territories to maintain a link to the EU even if the UK withdraws.
What does the thesis conclude about Germany's position?
The thesis argues that while Germany might benefit from a shift in financial trading from London to Frankfurt, the overall impact on German industry is likely to be negative due to trade loss and regulatory uncertainty.
- Citation du texte
- Markus Passlack (Auteur), 2016, Brexit. Macroeconomic Consequences, Munich, GRIN Verlag, https://www.grin.com/document/345023
