The International Monetary Fund has warned that the UK’s departure from the EU without a deal would cause significant economic trouble across Europe and nobody would come out as a winner, The Guardian reports.
The new Brexit secretary, Dominic Raab, warned Europe to prepare for a no-deal Brexit, but the IMF says it would hurt the UK the most, as well as cause economic damage for the other EU nations.
The IMF says economic growth in the remaining 27 EU states could fall by as much as 1.5 percent by 2030 if the UK falls back on WTO rules for trade with the EU after Brexit. The UK’s economic output would drop by about 4 percent, and Ireland would suffer almost as much due to its strong ties to Britain.
The long-term impact of a hard Brexit would also be spread across the EU as the UK is among the Union’s top three trading partners, accounting for 13 percent of trade.
Mahmood Pradhan, the deputy director for the European department at the IMF, said: “We are very concerned. It’s quite late in the process and we don’t see any clarity yet on the future relationship and we’re getting near some important deadlines.”
The fund also warned that a free trade agreement between London and Brussels – the option Theresa May prefers – would still have many negative consequences for both sides, as GDP could drop by as much as 0.5 percent across the EU, while the UK and Ireland would lose more than 2 percent.
The only “relatively benign” scenario for Brexit, says the IMF, would be if the UK remained a member of the European Economic Area, similarly to Norway, which would cause “negligible” losses for the economy.