Prime Minister David Cameron is busy trying to convince the European Union’s other 27 member countries that a ‘Brexit’ – Britain’s exit from the EU – is a good idea.
But while he has his work cut out at the European Council in Brussels as most members are more preoccupied with other issues such as Greek debt and the threat from terrorist group IS, a new study has revealed which countries would suffer the most if DC’s plan went ahead.
Who is most at risk from a potential ‘Brexit’?
Ireland, Cyprus and the Netherlands, according to the study.
Why those three in particular?
The three countries all enjoy strong trade, investment and financial links with the UK, as well as sharing similar attitudes towards trade and regulation.
Ireland is classified as being at “high exposure” from a Brexit due to its strong financial links with the UK as well as its exports to the country, which total almost 12% of GDP including 14.8 billion euro (£10.5 billion) of goods and 5.8 billion euro (£4.1 billion) of services.
Dutch firms have direct investments worth 177 billion euro (£125.8 billion) in the UK, earning more than 9 billion euro (£6.4 billion) in 2013 – equivalent to almost 1.5% of GDP. Cyprus exported 1.3 billion euro (£924 million) to the UK in 2013, and there are extensive financial sector links between the two countries.
While Ireland, Cyprus and the Netherlands are the only ones named by the report as being at “high exposure” from Brexit, a total of 14 are listed as being at “significant exposure” including Greece, Sweden and Germany, and a further six are classed as being at “niche exposure”.
This latter category includes France, which the report says is at risk thanks to trade and financial links. French investment in the UK stood at 91.6 billion euro (£65.1 billion) in 2013.
Poland is also in the “niche” category, thanks to high levels of migration with the UK. The report says there are estimated to be 726,000 Poles currently living in Britain, most of whom are young, skilled and economically active. Many send money back to Poland, estimated to amount to 1.1 billion euro (£782 million) in total each year.
Who would be the least affected by a ‘Brexit’?
Just four countries are listed at being at low exposure: Romania, Italy, Croatia and Slovenia.
Who did the study?
It was published by the Global Counsel, a strategic advisory firm supporting international business and based in London. The forecasts appear in a report which examines the possible impact of Britain leaving the EU on countries across the continent.
And in conclusion?
The report’s author, Dr Gregor Irwin, said: “The impact of Brexit on British businesses, the UK economy and wider British interests would be severe and felt across multiple channels.
“The direct impact on the rest of the EU would also be significant. The export, supply chain, investment and policy interests of many large corporates would be adversely affected, but perhaps the single biggest impact will be on the cost of raising finance in Europe which is likely to increase.”