1. Home
  2. Press
  3. Press Releases
  4. British confederates
Show image in lightbox British confederates
(© Photo: oversnap)
Share this article:

or copy the following link:

The link was added to your clipboard!

Brexit Press Release 13. December 2016

British confederates

Post-Brexit, the British still want full access to the EU Single Market - and, at the same time, retrieve sovereignty in terms of regulation and restrictions on immigration. This contradicts the principle of giving and taking: London will have to strike a balance of the two with Brussels. The Cologne Institute for Economic Research (IW Köln) has established a framework to objectify the negotiations and shows that Switzerland could be a model.

Share this article:

or copy the following link:

The link was added to your clipboard!

There are several options for future economic relations between London and Brussels. One is the Turkish option: The country makes little concessions on regulation and freedom of movement of people, does not pay anything into the EU budget and, in return, gets only little access to the EU’s market. Norway, on the other hand, makes major concessions and has almost full access to the single market. Switzerland has opted for a medium solution. From our point-of-view, also the negotiations between the EU and the UK about their future relationship has to maintain the balance between giving and taking.

We develop a new framework that reflects this reciprocity and evaluate the strength of the negotiating positions of the UK and the EU. On this basis, we estimate the possible British concessions and the achievable access to the EU’s market in return:

  • London is likely to make little concessions in the area of the free movement of people - the issue is too delicate at home. Yet, the EU insists on the key role of free movement for its citizens. It could make passporting rules for the British financial industry contingent upon the free movement of people.
  • In recent years, London has paid on average of € 9.4 billion to Brussels. In future, it will be much less. However, the whatsoever arrangement will not work without British contributions. "London will have to pay to achieve access to the EU's market to some extent – and it is prepared to do so," explains Senior Economist Jürgen Matthes.
  • Regarding regulation, London will probably demonstrate more flexibility. It is unlikely that the UK will significantly reduce consumer and environmental protection. We also conclude that the UK will continue to align many product standards with the EU.
  • Moreover, the British deficit in goods trade and the significant role of the UK in security policy have to be taken into account. On the other hand, the fact that the UK is much more reliant on access to the EU than vice versa.

"Overall, the British concessions will be limited to a medium degree at best. Thus, access to the EU’s market will also be restricted to a medium category," says Matthes. Something in the range of the Swiss Model is thus the most likely outcome for Britain, albeit framed in a single agreement.

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
Jan Büchel / Barbara Engels in European Liberal Forum External Publication 4. July 2022

The Importance of the Data Economy for Europe’s Digital Strategic Autonomy

European companies need to have the ability to store, process, use, and share data securely and autonomously, for example by using cloud services based on agreed quality standards, values, and legislation.

IW

Read the article
Hubertus Bardt / Klaus-Heiner Röhl / Christian Rusche in The Economists' Voice External Publication 21. June 2022

Subsidizing Semiconductor Production for a Strategically Autonomous European Union?

The COVID-19 pandemic has highlighted the vulnerability of international supply chains and the dependency of the economy of the European Union (EU) on goods from non-EU countries. The scarcity of microchips that has persisted since the COVID lockdowns has laid ...

IW

Content element with id 8880 Content element with id 9713