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The bloc’s largest economies will bear the burden of a £ 30bn loss in trade with the UK in a no-deal scenario, according to a new report. German insurance giants Allianz have revealed potential business declines for automakers, chemical producers and other manufacturers across the bloc if Michel Barnier refuses to budge on the dispute over a post-Brexit trade deal. His report urges EU leaders such as Angela Merkel of Germany and Emmanuel Macron of France to accept a pledge to avoid a loss of £ 30 billion in the bloc’s exports to the UK due to the introduction of trade tariffs.
“A hard Brexit could cost up to € 33 billion in annual exports to the EU,” he says.
Researchers predict that Germany could lose up to £ 7.4 billion in annual trade with the UK as a result of a no-deal Brexit.
And France would suffer a loss of 3.3 billion pounds unless a deal can be reached in the next three weeks.
Boris Johnson has been adamant that Britain will negotiate with the EU on “Australia-style” terms if the bloc refuses to offer concessions on its demands for continued access to British fishing waters and a level playing field, including subsidies. state for companies.
Emmanuel Macron and Angela Merkel to be hit for at least £ 10bn after a no-deal Brexit (Image: GETTY)
German Chancellor Angela Merkel (Image: EbS)
The prime minister’s plan would see the introduction of trade tariffs between the UK and the EU unless compromises are found.
Until now, President Macron has been the most intransigent leader of the EU, insisting that the bloc maintains its hard-line stance on the dispute over fisheries and state aid.
According to the study, this would affect a number of crucial industries in both Germany and France.
And Johan Geeroms, chief risk officer at Euler Hermes, a Dutch subsidiary of Allianz, said the risk of a “hard Brexit has risen to nearly 50 percent.”
French President Emmanuel Macron (Image: GETTY)
“If we get a no-deal Brexit, the entire UK export business will be reviewed,” he added.
“New agreements are needed for this. Transport by road, air, sea. Also consider the huge disruption within supply chains, administrative hurdles, higher transportation costs, and wasted time. “
France will see impacts mainly on exports of “transport equipment, chemicals, machinery and electrical equipment, food and beverages, pearls, precious stones and metals.”
Germany’s biggest hits come in “transportation equipment, electrical machinery and equipment, chemicals, plastics and rubber, and base metals.”
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Boris Johnson has said he is prepared to leave the EU without a trade deal. (Image: GETTY)
If President Macron and Chancellor Merkel agree to a compromise in the Brexit talks, the loss of trade with the UK could be cut almost in half immediately as both sides settle into their new trade relationship.
Allianz called on the EU and the UK to conclude their negotiations in three weeks to ensure that companies on both sides have enough time to adapt to the changes.
They claimed that a “technical extension” of the post-Brexit transition period could be used to ensure that any deal is fully operational.
Their report says: “It is worth mentioning that if an agreement between the UK and the EU is not finalized by the end of October / mid-November, there will not be enough time for a full ratification of the FTA before the end of the year.
“Therefore, we do not exclude the possibility of a technical extension of the transition period despite the commitment of both parties not to do so.”
The insurance company also noted that Britain would see “a 5 percent contraction in GDP and a 15 percent drop in exports” if it withdraws from the EU without a deal.
Barnier, the EU’s main Brexit negotiator, agreed to stay in London until Wednesday to continue trade talks with his British counterpart Lord Frost.
The pair are then expected to resume their dispute over a free trade agreement later this week in Brussels.
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According to the prime minister’s spokesman, the UK and the EU have finally started working on a joint legal text.
Barnier had previously refused to write about the Brexit deal until Johnson made significant concessions on fishing and the so-called level playing field.
The spokesperson said: “We are in what is an intensive phase of negotiations.
“I would not like to anticipate what is being discussed.
“It is the first time that we have been negotiating on legal texts and in all areas at the same time and we have welcomed it.
“But there is also a lot of work to be done if we are to close the significant gaps that remain between our positions in the most difficult areas and time is very short.”
Johnson previously said: “On the EU negotiations … they have returned, I am very happy to say, to discuss the way forward, we will see where we go.”
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