No trade deal would cost EU twice as many jobs as Britain: Around 1.2m would be lost in remaining 27 nations following a ‘hard Brexit’
More than twice as many jobs will be lost in the EU as in Britain if we leave without a trade deal, a report says.
About 1.2 million jobs would vanish in the remaining 27 EU countries after a ‘hard Brexit’, with nearly 530,000 axed here.
The findings were seized on as evidence that it was in the interests of both the UK and Europe to strike a deal.
The report, by the Centre for Economic Policy Research (CEPR), warned of more than 290,000 job losses in Germany and approximately 140,000 in each of France and Italy.
But the Republic of Ireland would be worst hit relatively as more than 50,000 jobs could be lost – more than 2.5 per cent of the workforce. The report said: ‘The EU27 stands to lose considerably more than previously thought.’
Campaigners accused Brussels negotiators of putting more than one million jobs at risk across Europe by refusing to open trade talks.
Former Labour MP Gisela Stuart, chairman of the Change Britain pressure group, said: ‘With the EU in the midst of a youth unemployment crisis, it would be irresponsible for politicians in Brussels to refuse a deal which could then see over one million jobs lost in Europe.
‘It’s yet further evidence why it’s in the EU’s interests to strike a trade deal with the UK. Any attempts to delay trade talks will only be to the detriment of EU businesses.’
The report warned that Irish and Spanish farmers would suffer from a hard Brexit alongside the German car industry and businesses across France and Italy and beyond.
Written by three CEPR economists based at the University of Leuven in Belgium, it also noted that the Belgian steel sector would suffer both through a reduction in exports to the UK and also through a reduction in demand for steel that would have been used in German cars sold here.
It said: ‘Both the UK and the EU27 would suffer substantial losses if they are denied free trade access to each other’s markets when Brexit happens.’
The nearly 530,000 job losses here represent just over 1.6 per cent of the British workforce of 32 million.
The 1.2 million losses in the EU account for around 0.6 per cent of those in work across the other 27 members of the bloc.
Last night Eurosceptic Tory MP Sir Bill Cash warned of ‘very adverse consequences’ for the EU if there is no deal, adding: ‘Their attitude is completely and totally counter-productive.’
Gerard Lyons, co-founder of Economists For Brexit, said: ‘There is no doubt that in economic terms, once the politics have been taken out of it, it is in the European Union’s best interests to have a deal with the UK.
‘It is in everyone’s interests to do a free trade deal. But in terms of the job losses, I would be very wary, because I think the UK can do very well.’
John Longworth, the former head of the British Chambers of Commerce, said: ‘This report indicates the importance of a deal to the EU.
However, if the UK Government applies the correct post-Brexit economic policies, the boost in the economy arising from these will mean no job losses at all in Britain.’
Meanwhile, the Bank of England has warned that millions of EU citizens will be left with useless life insurance policies unless a Brexit compromise is reached.
It said 30 million people and businesses in the EU have £40 billion of policies, such as life insurance, with British businesses. These will stop being valid unless the EU writes a law allowing them to continue.
About six million Britons have policies worth £20 billion with insurers across the Channel, and Parliament will need to pass a law here to avoid disruption.
The Bank’s governor, Mark Carney, said: ‘It’s absolutely in the interests of all parties, but very much in the interests of Europe, that elements of close co-operation are continued after Brexit.’
The Bank also warned that £26 trillion of contracts between UK and EU banks will stop working once we leave the bloc unless new laws are passed in Brussels and London.
It added that British lenders have strong enough cash reserves to survive if there is a no-deal Brexit.
The Bank carried out a so-called stress test to see if they could cope with unemployment more than doubling to 9.5 per cent, a 33 per cent fall in house prices and a 2.4 per cent contraction on the global economy.
This is much worse than what happened during the financial crisis. But the biggest seven British lenders would remain afloat, the test found.
November 29th, 207: Daily Mail