EU begs the UK to stay in the single market
According to the President of the Kiel Institute for the World Economy Mr Felbermayr, “The schedule for the UK and the EU to negotiate a free trade agreement is extremely ambitious and cannot be achieved by 2021 or 2023″.
He did however add that “Great Britain is in a good negotiating position with the EU” and added that “The great uncertainty as to what Brexit really means in the end for relationships and especially for companies in both economies remains”.
Britain’s economic weight amounts to 18 of the EU’s smallest members combined.
“From an EU perspective, it is particularly difficult to see that without a close connection to Great Britain, it will be in the new system competition between the USA and China as a weakened third party and lose considerable bargaining power.”
Mr Felbermayr claimed the EU must be “willing to give up its dogma of the inseparability of the four fundamental freedoms – free movement of goods, services and capital, as well as the free movement of people”.
He added: “The bigger the single market, the stronger the European voice in the world.
“The United Kingdom has presented a compelling low-tariff strategy in the event of a no-deal, the country mainly exports non-tariff services anyway.
“The economic damage of a no-deal would be roughly equal on a percentage basis on both sides, and Britain would hardly suffer economically more than the EU.
“In addition, it can be assumed that Great Britain will build up additional bargaining pressure with the EU through a free trade agreement with the USA and further deregulation and tax cuts.”