Bundestag Study: Britain Risks Economic Crash

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Picture source: Reuters

The German parliament, in a study obtained by Handelsblatt, forecasts that Brexit will cause significantly more economic damage to Britain than the other 27 E.U. member states.

According to the study, Britain’s gross domestic product could drop by up to 9.5 percent by 2030 compared to what it would have been if the country had remained in the European Union.

While the British economy will face considerable losses, particularly in the case of a hard Brexit, the effects will be limited for the E.U. 27,” the study said.

British Prime Minister Theresa May has said her government plans to pull Britain out of the E.U. single market for goods and services as well, a so-called hard Brexit.

According to the study, companies are already holding back on investing in Britain due to uncertainty about the impact of Brexit, according to the consulting firm KMPG.

Most companies are waiting,” Marcus Schüller, a partner at KPMG, told Handelsblatt. Brexit carries diverse risks, including “the development of customs, taxes, wages and exchange rates,” Mr. Schüller said. New customs would be the most problematic additional cost factor, he added.

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