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For the first time, Boris Johnson admitted that it is highly likely that on January 1, 2021, Britain will leave the EU without a deal. In that case, the British would lose a lot, predicts Deutsche Welle. This it is:
For the first time, the British prime minister acknowledged that Britain was “very likely” to secede from the EU without an agreement. That was not the objective he was pursuing, but it would allow the country “from January to do only what it wants.”
Until now, Boris Johnson has always talked about an “Australian deal”, given the lack of a trade deal with the EU. However, former Australian Prime Minister Malcolm Turnbull responded by saying: “Be careful what you wish for. Australia’s trade relations with the EU are not what Britain might want,” he explained. Because this would mean that all trade will be carried out in accordance with the rules of the World Trade Organization (WTO), and for some business sectors they are extremely profitable.
If no agreement is reached, other aspects of current cooperation will be abandoned, for example in the field of the energy market or interaction between law enforcement authorities. What exactly will change from January 1, 2021?
Ports and borders
According to a British government scenario, long lines of trucks will form near Dover and the rest of the English Channel, up to 7,000, who will likely have to wait up to two days to cross the border. The EU plans to introduce a full customs control from the beginning of 2021. Important formalities will now be required for ferry trips: completion of tax and customs declarations, certificates of origin, veterinary control. In Dover alone, nearly 10,000 trucks have been handled daily. This will hardly be possible in the future. Huge truck parks have already been built near the port. London has estimated that British companies will face extraordinary costs of 13 billion pounds. With the help of emergency regulations, the EU intends to maintain air traffic to and from the island for at least six months, and to recognize the permits of bus and truck drivers.
Vacations, insurance, driver’s licenses
However, in the future, British tourists will have to queue for non-European citizens at airports, they will lose their current entitlement to European health insurance and will probably already need international liability insurance for their cars, as well as a new driver’s license. drive. for the EU.
And more: in case of restrictions imposed due to the pandemic, British citizens will temporarily not have the right to enter EU territory. A large number of documents will be required for pets. And those who own a second home in the EU will be entitled to a stay of only 90 days in half a year. This fact has already caused some heated headlines in the British press.
Trade, customs and merchandise
Britain’s auto industry fears that Brexit could deal a fatal blow without a deal. Nissan, which manufactures in the British port city of Sunderland, has already announced that it is considering closing its plant there. Due to the long wait at the borders, just-in-time deliveries will no longer work as before. That’s why Honda’s Swindon plant has already closed. In addition, WTO rules establish 10% tariffs on automobiles. This would destroy the competitiveness of UK-made cars, along with thousands of jobs.
The British pharmaceutical industry will need to obtain additional permission from the European Medicines Agency (EMA) to be able to sell its medicines in Europe. And that takes time and costs a lot of money.
The island’s agricultural products will be subject to new European tariffs: for dairy products they will be 30% higher, for beef and lamb 40% and more. Furthermore, European subsidies to farmers, who represent almost half of their income, are eliminated. For many British farmers, this can be fatal. Many of them voted for Brexit because they could not assume that Britain would leave the EU without a deal to guarantee their rights.
Financial markets and services
The most important British export product is financial services. They would not be the subject of a trade agreement between the EU and the island anyway, but a lack of goodwill on the part of the EU could also have an adverse effect.
British banks and insurers lost their permission to operate in the EU in January 2020. In the future, they will need a document recognizing the equivalence of their services, a permit that Brussels can withdraw whenever it wishes.
Some British companies have established subsidiaries in the EU to operate in Europe. The EU still needs certain financial services from the City of London, but Paris, Frankfurt and other cities have the ambition to gradually take over. Therefore, the future of the city is not clear.
The qualifications of UK lawyers, architects and engineers will clearly not be recognized in Europe, and these staff will need expensive work visas if they want to work temporarily in the EU. The same goes for artists.
What are the consequences for the EU?
It has always been said that both parties have missed the consequences of Brexit. As well as the fact that Britain will lose more as almost 50% of British trade is linked to the EU. “We are 27 years old and the British are one country, and the EU is the richest domestic market in the world with more than 400 million consumers,” said Maria Demercis of the Brussels-based think tank Bruegel.
But the EU would also painfully feel a Brexit without a deal. This is especially true in the Netherlands, Belgium and northern France, where there are several subcontractors to British companies, and also because these regions have been particularly active in trade with the United Kingdom.
The biggest nominal loser would be Germany, but its entrepreneurs have long been reoriented. British companies, for their part, have gone from third to fifth place in the ranking of their most active business partners.
A special case is Ireland, whose economy is traditionally closely linked to the British. That is why the Dublin government is more concerned about the danger that Brexit poses without a deal.
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