How much economic damage every region in Europe is set to face due to Brexit is revealed in a new study by University of Groningen’s Professor Bart Los and Dr Wen Chen, along with colleagues from other institutions. The United Kingdom is estimated to feel the brunt of the fallout. But its closest trading partners face steep risks too, such as Ireland, Germany, the Netherlands, Belgium and France, according to the study.
The results show that between 10-17 percent of GDP in UK regions is at risk from Brexit. Ireland’s situation is similar to the least at-risk areas of the UK, such as London and Scotland, with 10 percent of GDP at risk. The next-most exposed regions are all in Germany, where between 4.5 percent and 6.4 percent of regional GDP is at risk. In parts of the Netherlands, as much as 5 percent of GDP is at risk from Brexit.
‘The UK and its regions are far more vulnerable to trade ‐ related risks of Brexit than other EU member states and their regions,’ concludes the paper, published in Papers in Regional Science. ‘It is many of the UK’s economically weaker regions which are especially exposed to Brexit.’
The researchers were able to estimate the negative trade effects by using the World Input-Output Database. This trove of data maintained by the Groningen Growth and Development Centre shows what regions in Europe buy and sell from each other, giving a more detailed picture than that available in national accounts. The full data, including region-by-region breakdowns of the labour income at risk from Brexit, is available via the Open Access article in Regional Science:
The continental divide? Economic exposure to Brexit in regions and countries on both sides of The Channel
Contact: Bart Los, Professor of the Economics of Technological Progress and Structural Change
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