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The European Commission’s summer forecast predicts that British growth will slump to -9.7 percent before showing signs of rebound as coronavirus restrictions are lifted across the country. They expect the bloc’s two biggest economies to also be hit as a result of their lockdowns, with Germany’s GDP forecast to fall back to -6.3 percent and France’s down to -10.6 percent. But eurocrats said that despite doing better than France, Britain faced a more troubling rebuilding process as a result of Brexit.
As Brexit talks get underway in London, the Commission added failure to secure an agreement before the transition period expires at the end of the year would have more repercussions on Britain.
Their report said: “It is possible that the transition period ends without any agreement on the future trading relationship.
“Even if a trade agreement between the EU and the UK is concluded, the future EU-UK trading relationship will be less beneficial than assume in the purely technical assumption of an unchanged trading relationship, and will therefore lead to more negative outcomes for both sides, in particular for the UK for which trade with the EU is more important than trade with the UK for the EU.”
It added: “A failure to secure an agreement on the future trading relationship between the UK and the EU could also result in lower growth, particularly for the UK.”
Rupert Lowe, a former Brexit Party MEP, hit back at Brussels, insisting the bloc should keep its nose out of Britain’s affairs.
He said: “The EU’s behaviour is becoming more and more like that of a bitter, jilted ex-partner.
“Increasingly desperate to see us fail and will do anything in their power to make that happen.
“As we finally come out of lockdown, the last thing the British people want to be told is that we can’t succeed by some jumped up bureaucrat whose tax free salary will go untouched whatever happens. Take a hike!”
The Commission’s forecasters expect Britain’s economy to bounce back by six percent next year.
But their growth figures are based on a “status quo” relationship between the UK and EU, something ruled out by the two sides’ trade negotiators.
Their report said: “As the technical assumption implies a status quo for 2021 in terms of trading relations, the risks to the forecast are predominantly to the downside.”
France’s economy is expected to pick up by 7.6 percent by 2021, but the country’s GDP will still be lower than it was before the crisis.
Germany, the EU’s richest economy, is set to suffer a slower recovery because of its reliance on industrial exports.
Forecasters said: “Risks are tilted to the downside and relate to a possibly more protracted international fallout and depressed export demand.
“Given the strong export orientation of Germany, this would take a larger toll on industrial activity and may slow down the recovery.”
Commission vice-president Valdis Dombrovskis said: “The economic impact of the lockdown is more severe than we initially expected.
“We continue to navigate stormy waters and face many risks, including another major wave of infections.”
Paolo Gentiloni, the EU’s economy commissioner, added: “Coronavirus has now claimed the lives of more than half a million people worldwide, a number still rising by the day – in some parts of the world at an alarming rate.
“And this forecast shows the devastating economic effects of the pandemic.”
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