Time is running out for a deal in December. Brexit talks are currently stalled on the first phase of negotiations, covering EU citizens’ rights, the money, and the Irish border. Of those, the border question is proving to be the most intractable, with a near-agreement collapsing at the last minute after Theresa May’s allies in the Democratic Unionist Party (DUP) deemed the text of the deal unacceptable because it implied Northern Ireland would stay in the EU Single Market.

Meanwhile, the Article 50 clock keeps ticking down. European Council President Donald Tusk has tweeted: “It is now getting very tight but agreement at December [European Council] is still possible.” If the deadline is missed, then that will leave even less time to get a final deal by March 2019, when the UK is set to leave the bloc.

If anything, phase two of the talks will be even more fraught with difficulty. During the second phase, the UK and EU will need to set out the framework for their future trading relationship, as well as agree on the terms of the transition period. It’s unlikely a trade deal will actually be concluded when Britain leaves the EU in 2019, but the outline needs to at least be in place, and business has warned that a transitional deal will need to be agreed in order to avoid a disorderly Brexit. The chances of talks collapsing have been put by some at over 50%.

What do our readers think? We had a comment sent in from Kata, who points out that a “no deal” scenario would also seriously damage the EU-27’s economy, resulting in the “loss of revenue, loss of businesses, and the loss of jobs”. Is Kata right? Who would lose the most if Brexit talks failed, the British or the EU-27?

To get a response we spoke to Patrick Minford, Professor of Applied Economics at Cardiff Business School and a former economic adviser to Margaret Thatcher. Who does he think stands to lose the most if talks collapse?

Well, the EU-27 would lose. The British wouldn’t actually be affected. We’ve looked at this through the lens of our trade and macro models. The main thing is the trade aspect; the UK wants to get to free trade because that’s the main thing that the EU stops it doing. It puts tariff and non-tariff barriers between us and the rest of the world, and the main object from the trade point of view in leaving the EU is to get rid of those barriers. That brings a big gain, either doing it through free trade agreements or getting rid of barriers unilaterally.

If the EU erects tariff barriers between us, which obviously we don’t want (and we don’t think the EU wants it either), that will mean that the EU producers will have to sell in our market against competition from the whole world at world prices, and to sell us anything will basically have to lower their prices to world prices. So, if the EU puts a tariff on what they sell us, or we are forced to put a tariff on them by the fact of no trade deal, they will simply get less money. And if the EU puts a tariff on our exporters, then our exporters anyway are going to have to sell at world prices to compete with competition from around the world, and they will have to charge EU consumers more. So, again, EU consumers will pay. Basically, no trade deal means that EU consumers and producers pay the tariff to the EU.

To get another perspective, we also spoke to Elmar Brok, a senior German Member of the European Parliament and part of the group of MEPs who met with Jean-Claude Juncker ahead of his lunch with Theresa May. What did he think?

We would all lose. Even if we have a Brexit on best terms, we will all lose. However, due to the different size of the European domestic market compared to Britain’s, the British side clearly has much more to lose not only in peripheral regions like Scotland and Northern Ireland but in total. Furthermore, there would be less investment [in the British economy] but it would take two three years to notice this, although you can already see it happening if you look at certain economic data. So, I think it would be in the British interests to come to a sensible solution and not listen to the hardliners so much.

Finally, we put Kata’s comment to Hans-Olaf Henkel, a German MEP with the Liberal Conservative Reformers, an economically liberal party that splintered off from the Alternative for Germany (AfD). What would he say?

For me, Brexit is a lose-lose situation. The British are losing from this, you can see that happening already in the economic data. In the past, Great Britain was far ahead of the Eurozone [in terms of growth], today it is at the bottom of the rankings. The British now have inflation of 3% and still have to keep interest rates low. The first jobs are already leaving the UK.

But the Europeans will also lose. We are losing the last nation with common sense, and we need the British in Europe. Because the British always stood up for freedom, personal responsibility and autonomy. That was an important corrective to the people here in Brussels, who constantly want more centralisation, more bureaucracy and more harmonisation. That’s why I’ve started a new initiative with other German business personalities and it’s called a “New Deal for Britain”. It is aimed at Brussels and calls on Brussels to make a new offer to the British, an offer that could prevent the British from actually going through with Brexit.

Who would lose the most if Brexit talks failed? Does Britain stand to lose the most, or would the economies of the EU-27 be more affected? Would it be equally disastrous for all sides? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!


89 comments Post a commentcomment

What do YOU think?

  1. Merin

    UK because banks and big companies moves to Europe and Europe will have new jobs and much more money… UK however loses banks, jobs and will be poorer than ever. Also as we can see, UK economic is falling, pound is falling (which is good for EU).

    • Tarquin Farquhar

      Cheaper pound ==> more UK exports, less EU imports ==> bad for EU.

      Some banks will move BUT the EU will stifle bank freedom in the first instance and secondly, it will take decades for the EU to fund itself as cheaply as via London banks.

      The UK can afford to lose 3.2 million EU-foreigner jobs if the going gets tough!

      UK economy is still +ve ==> the rate of increase could be better though.

  2. Roger Bylèhn

    We would both lose a lot but in the end I think UK gets the shorter end of the stick and risk both financial struggle, social unrest and greater demands for independence from the other countries in the Union.

    • Marko Martinović

      Not if they put Farage on it. He would sort it out

    • Stephen Pockley

      You Europeans really have to stop this the UK is breaking up rubbish, far from it didn’t you hear the DUP speech. Also we have a 61% deficit with the EU also the EU will lose it’s biggest military asset .

    • Roger Bylèhn

      “Biggest military asset”? You mean the royal navy I assume since France is the biggest military power in Europe.
      And yes it’s mighty but so far the EU has no likely or even realistic enemy that across the oceans or would perform any large scale naval invasions or try to blockade our trade and food supplies.

      The most likely opponent (besides civil war in the union) is Russia and for them a land based invasions is Much more easier and practical.

    • Konrad Kowalski

      Roger Bylèhn We look at the experience of World War II. France “lost face” and honor.
      France did not prove itself as an opponent of Germany. France did not work as Hitler’s ally (Vichy’s government), too.
      France stands on “clay legs”, according to me

    • Derrick Farr

      But France also has the record of surrendering after being invaded and so letting the invaders have the lot…

    • Risteard O Ceallaigh

      Ammm Derrick, sorry to bust your bubble, but what happened the British Army at Dunkirk? My own grandfather was with the Britain Expeditionary Force. Britain was saved because the German army didn’t follow the British army into the sea. If Britain had a land border with Europe, Britain would have come under German rule also. No doubt about it. If the German Army had invaded Britain instead of turning East to Russia, Hitler’s main target, Hitler had no real interest in Britain, where would the Americans have staged for their assault to take back Europe? Ireland maybe?

    • Baz Daly

      Stephen Pockley the DUP is akin to the dying days of FW De Klerks party in apartheid South Africa….enough’s enough….they are a hindrance…if Britain’s position changes in the morning so will theirs…in the way…out of touch…not representative of their electorate…propping up a Tory gov is ALL they have…everything after that is moot….

    • Stephen Pockley

      Roger Bylèhn France is the biggest military power in Europe ??? 😂😂😂😂😂😂😂😂😂that’s is comedy gold

    • Robert Malseed

      Actually Derek., Britain has surrendered more times than France – ever since losing the colonies of North America, through to when we got our independence…then there was the surrender of Singapore to a much smaller Japanese force. Britain would have been totalled if it wasn’t for the commonwealth countries (ANZACS, Indians, Gurkhas, Sikhs etc.,)

  3. Peter Ayolov

    Everyone’s a winner, baby, that’s the truth (yes, the truth)
    Everyone’s a winner, baby, that’s no lie (yes, no lie)
    Brxit never fail to satisfy (satisfy)

    • Geraldine Looney

      Be brilliant if they did it’s a load of crap

    • Derrick Farr

      nope ……your countries subscriptions are going up and your rebate is going down…

    • Tarquin Farquhar

      @Antonio Jose Pecurto Pecurto
      No thank you, sorry!

    • Paul X

      So you think the UK can suddenly say “stop, we’ve changed our mind” ?

      Even if there was the political will in the UK to do this what exactly do you think the EU’s reaction will be?…do you think they will be all happy and smiles and welcome us back as if nothing happened?…….or do you think they will take full advantage of the situation to screw more concessions out of the UK?

      ….either way the fact the EU now has no doubt that the UK awkward relationship with the EU isn’t just political but is also backed by majority public opinion means the relationship can never be the same as it was

    • Ivan Burrows

      They are not my figures comrade but those of your unelected European Politburo lol

    • Josh Nolan

      A) If you’re referring to the EU commission; the commissioners are appointed by the heads of state of each country; who in turn are elected. It’s like complaining about not electing your prime minister. You elected the party; the party appoints its members.

      B ) You realize 3 million jobs in an economy of 500 million people aren’t actually that hard to replace?

    • Lourd McCabe Brockmann

      no they wont, probably a lot of them have already applied for 2nd country nationality..

    • Tarquin Farquhar

      @Josh Nolan
      The EU-27 population is at least +60million lower than 500million.
      As regards replacing lost jobs in the EU-27 – tell that to Greece, Spain, Italy etc etc

    • Cumidhe

      We lose britain. Happy days.

  4. Konrad Kowalski

    The EU has time to negotiate by December 20.
    On December 21, Prime Minister May will come to Poland (with the most important ministers) with an official visit. The British will start negotiations with individual countries.
    The stable political situation and unwavering moral attitude Poland caused that the arrival to Warsaw is a ennoblement for every government in the world

  5. Αναγέννηση

    Britain will most certainly lose. Add to the fact that Greece wants € 600 billion in compensation due to the British Crimes against the Greek State from 1967 till the present which began with the British State Sponsored installation of the Greek Military Junta in 1967 . designed to pave the way for the British State Sponsored Turkish Military invasion and occupation of EU member Cyprus since 1974, whcih is part of the British- Turkish alliance in Cyprus against the United States since 1950, that resulted in the American military debacle of Iraq in 2003 that has lasted for more than 14 years , whcih began in 2003 as a result of the Turkish hostility to the ascension of Cyprus into the European Union on May 1 2004.

    • Konrad Kowalski

      Αναγέννηση @ What material damage did Greece suffer? Where is the value of 600 billion?

      Poles demand that Germany receive over $ 1,000,000,000 for material damage and the return of 500,000 works of art. Six million victims and the loss of 78 thousand kilometers Poles do not count as material damage

    • Konrad Kowalski

      Αναγέννηση @ What material damage did Greece suffer? Where is the value of 600 billion?

      Poles demand that Germany receive over $ 1,000,000,000 000 for material damage and the return of 500,000 works of art. Six million victims and the loss of 78 thousand kilometers Poles do not count as material damage

    • Derrick Farr

      what a load of bollocks…pity you did’nt add the claim of 230 bil they want from germany….your bankrupt country is owed nothing…..your a parasite to the eu. but germany now own you….you were pennyless when turkey invaded and were pissed of cos we wouldnt come….turkey invaded cos you treat the turkish cypriots like shit……

  6. eleni

    The trade between EU-UK was worth of 600 bn euros in 2016. (US-UK trade was about 80 billion euros at the same time.)By its own mistake the UK risks of severing ties with its most valuable partner.If things follow this way, the UK is going to be the big loser.

    • Paul X

      EU-UK trade will continue after Brexit, it may be under different terms but it will continue none the less

  7. EMB

    I sorry to say that uk does not represent a big market for EU, whereas EU do. Uk will be the most affected as it will have to sell its products to the rest of the world. The opinion of the experts is more à manipulation of the opinion than a real expertise. Even their job will be affected as they will no more have freedom of circulation in EU member states they have today. Their work will be affected toi. So they are selling theories I am not sure they bellieve themselves. It is the same manipulations they used to make uk Citizen vote for the brixit. If a referendum was organised today, i am pretty sure the result will be UK to remain in the EU.

  8. Jeremy Evans

    I’m facing losing my home in France plus our jobs and our daughters education if we have to return to the UK.once the mortgage has been repaid,that’s providing we can sell,we will be left with nothing so we will become homeless and jobless.

  9. Josh Nolan

    Brexit will almost definitely fuck over the UK more than any other party – but Ireland has a lot to lose in these talks too. Britain has a moral responsibility to prevent a hard border in the North and we won’t tolerate any failure to deliver on that.

  10. Maia Alexandrova

    The companies who now rely on free movement of goods and people will lose most and this will be both in the UK and EU. There will be customs control which means more bureaucracy, time and money wasted, leading to higher prices of goods.

    For the same reason ordinary people on both sides will lose – they will have to apply and pay for visas every time they need to cross the EU-UK border, although arrangements are possible to get rid of that in future, but it is not certain when it will happen.

    Additionally, Northern Ireland may decide to join the Republic of Ireland, while Scotland could pursue the independence route towards EU membership, as they voted to stay in the EU, so UK might end up smaller than it is today.

    Without a deal the value of the pound will drop more, so British exporters will benefit, but the consumers will lose because of the increased prices of imported goods – life in the UK will become more expensive, unless salaries can catch up with inflation.

    EU workers will lose from not having free access to UK jobs, but as the 27 economies are picking up speed and salaries are increasing, the UK job market may not be that attractive any more. This is what Brexiters wanted anyway, so they will have to start filling those places in the food manufacturing, hospitality and construction industries, or have Indians, Pakistanis, Africans, etc. do the jobs and cover the shortages.

    Finally, the spirit of partnership between UK and most other European countries will be replaced with mutual animosity which is not a good prospect for the relationship between neighbours.

    • Paul X

      “they will have to apply and pay for visas every time they need to cross the EU-UK border” utter rubbish….. there are over 170 countries in the world you can visit with a UK passport without needing a visa, all the EU countries and many others beside. The only way you will need a visa between the UK and EU is if the EU invents a reason as some form of childish punishment

    • Paul X

      “Scotland could pursue the independence route towards EU membership, as they voted to stay in the EU”
      62% of Scots voted for the UK to remain in the EU, that does not mean those same voters support Scottish independence or would want to remain in the EU via an independent Scotland……. that is pure SNP hype

    • Karolina

      Paul, do you understand what “could” means?

      And the only reason why you can visit EU countries without needing a visa is because of EU agreements (I think other than you everybody else here understands this). It’s not punishment when they ask you for a visa. It’s what’s been agreed. You don’t have an automatic right to access all areas and people enforcing their immigration laws that apply to non-EU citizens is not punishment but what they are obliged to do.

    • Karolina

      And don;t even bother respond because I know the contents of your comments. Just hire a learning difficulties’ tutor to explain it to you because you are wasting everyone’s time with your non-comments that are self-explanatory to everyone else.

    • Paul X

      Karolina I’m afraid I have to respond because yet again you are talking utter rubbish. As I said, there are over 170 countries you can visit with a UK passport without needing a visa, only 27 of these are the EU so clearly visa free travel isn’t an exclusive right granted by the EU in any “agreement”… So please explain if the other 140+ countries are happy for UK passport holders to enter without a visa, what logical reason would the EU have for imposing a Visa requirement on people from the UK?

    • Karolina

      Ha ha ha, Paul, that’s not what the exchange above says though. You see how you either have learning difficulties or intentionally change things around when you lose the argument…

    • Paul X

      Karolina, I can only conclude you are reading a different forum to this one, I will make my point as plain and simple as I can…..

      Post Brexit there is no (logical) reason for the introduction of UK/EU visas and I have 100% confidence that UK passport holders will NOT require a visa to visit the EU

      Simple enough?…so unless you have evidence to the contrary I suggest this topic is closed

    • Karolina

      Ha, point already responded to above…as usual…

      Just make sure it looks like you never got it you lost the argument….

  11. Ian Michael Betts

    It’s simple take each country in turn and imagine it’s market was closed to the UK and vice versa. Let’s start with Germany 7% of Germany’s exports are to the UK so Germany would loose 7% of it’s export income. Repeat for each member state, most are not exposed to this extent other than Ireland which is in a worse situation, however the UK is exposed to the aggregate loss of trade, the UK stands to loose 40%, no single EU member state stands to loose anything like 40%. Just using Germany the much quoted example, it’s clear that the UK will be more than five times worse off than Germany.

    • Robert Malseed

      Ian, that was explained prior to the vote., however nostalgia for a long gone empire won out

  12. Steve Lane

    good bye , if thats what you want , go , we will find other trade partners , why do we have to find or do deals for britain , thats what they want , to leave , good bye , fuck em , europe can , and will live without them , they made the decision . not us . pay up and leave .

  13. Karolina

    Definitely, the UK, as trade with the EU is a larger percentage of UK GDP than trade with the UK is for the EU.

    • Paul X

      Unsurprisingly (yet again) you are incorrect. Trade is only one part of the GDP equation and the fact the UK has a trade deficit with the EU means it is actually lowering UK GDP

    • Karolina

      It doesn’t make sense to me, Presumably, when the data doesn’t suit your needs, you just make it up or twist it….

    • Karolina

      After reviewing the formula you have sent me I have come to the conclusion that your comment is irrelevant and you are trying to hide the fact that the UK is in a bad position because of people like yourself…

    • Paul X

      Haha……after reviewing your comment I have come to the conclusion that actually you do not understand the formula and how it is 100% relevent to your opening post on this thread

    • Karolina

      Paul, unless you can give me your name and university where you successfully teach economics and I can go on their website and check out your profile, please, don’t waste people’s time any further with your pointless comments because you will not admit that the UK is in a bad position because of Brexit.

  14. Karolina

    I do feel for Theresa May. She is left to sort out an impossible situation that she didn’t create. She was pro-remain anyway…

  15. Jorge do Carmo

    Is a lose-lose. But let them go at least one of the very good thinks that EU wins is to be free from the no stop English blackmail!

  16. Robert Malseed

    Here in Ireland, the political debate is that the British government are purposely failing in order to blame the EU., and that the Tories will keep Theresa May in place for a time in order to then place all the blame on her…
    Britain is that one partner that went out to have an affair (Trump) then wants a divorce., and not understanding that either way you guys screwed yourselves…
    The ironic thing is that it’s all self inflicted, yet still trying to blame others

    • Pierre Gorre

      Brexit might well come out as a “self-inflicted” wound and pain!!

  17. Cumidhe

    We lose britain. Happy days

  18. Ingrid Vilanova

    The answer is always the same: the poor; the poor, of the UK and of the EU, always lose out, whatever the scenario.

  19. Maggie Martin

    You’ll have to find a new hobby when they finally sort Brexit Paul!
    Maybe write a blog about the EU without the UK from the perspective of a ‘Rosbif’ living in Froggieland?

  20. Maggie Martin

    You’ll have to find a new hobby when they finally sort Brexit Paul!
    Maybe write a blog about the EU without the UK from the perspective of a ‘Rosbif’ living in Froggieland?

  21. Pierre Gorre

    Even if the pain is equally shared between EU and UK, the individual consequences for each UK citizen or resident and consumer; will be nearly ten times heavier than on the “continental” (and Irish) ones…. But I might be overly optimistic for my Brit’ friends!!

  22. J M Perz Gnlz

    I would love to talk about who would lose the most if the CETA treaty would be approved.

  23. Philip Cole

    Prof Minford seems to be out of touch with reakity. If Britain keaves the UK it will be the equivalent of committing national suicide. All serious economists are agreed on this. But this goes beyond economic considerations: the UK would be forced back into its own fantasy world, where carpet-biting neo-fascists feel most comfortable: a world that hasn’t existed since about1952; a world where Brits could treat foreigners with contempt; a world when we ‘still had an empire’; when we were still making fools of ourselves with the cretinous imperial system of measurements; abd ykrimately acworld in which people who gad become filthy rich felt no moral obligation whatsoever to pay higher taxes.

    • Paul X

      I think you will find the general consensus is Britain never had it so good as we did in the 1950’s, and for the filthy rich to avoid paying tax it has never been easier than it is today
      Instead of neo-fascists we now have neo-liberals and of course, having to count up to ten instead of twelve makes the UK a much better place doesn’t it?

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