Who needs who the most: Britain or the EU?
Who is most reliant on each other?
Who needs each other the most?
This is my last post of 2018 as I break for Christmas, so I thought I would end on an interesting article I read on the BBC over the weekend. It picks up on the notion, often bounced around post the UK-Brexit referendum, that the EU needs Britain more than Britain needs the EU.There is an interesting quote in the article from one of a growing number now of Ex-Brexit ministers, David Davis, which sums up this way of thinking within the UK:
"Within minutes of a vote for Brexit the chief executives of Mercedes, BMW, VW and Audi will be knocking down Chancellor Merkel's door demanding that there be no barriers to German access to the British market.'
The EU exports more to the UK, than the UK exports to EU
The logic here is that because the EU export more to the UK than the other way round, those EU 27 exporters have more to lose. Here is a breakdown of the EU 27 and what percentage of GDP they currently export to the UK. Belgium is the biggest exporter and I wonder how much of that is chocolate ;-)
Here also is the graph of the UK trade deficit gap wit the EU which is around £67 bln
UK's and EU's exports as a percentage of their GDP
- UK exports are 2.3% of the EU 27 GDP
- Britain's exports to the EU represent around 13% of our GDP
So, although the EU exports more than the UK it has a lesser impact on the EU's GDP since it is larger. This means that the headline 'The EU needs Britain more than the other way round is misleading'. Technically it is accurate, but the impact of a souring in trade relations and a no-deal Brexit on March 29 will hurt Britain's GDP more than the EU's.