As per a recent academic study a no-deal Brexit situation could have a negative effect on other EU nations too like Germany and its automobile sector that employs 100,000 people. The study that was the collaborative effort of Leibniz Institute for Economic Research Halle and Martin Luther University studied the effect of no-deal Brexit by breaking down its impact on countries in the EU along with cities and districts within UK. They drew conclusions based on the premise that imports into UK from EU nations would fall by 25% if there is a no-deal exit.
According to their estimates if this situation holds good then it would affect employment status of 612,000 people in 43 nations across the globe. They stated that Germany’s automobile sector would be the worst hit under these circumstances as it employs around 15,000 people solely to meet auto export requirements of UK alone. It estimated that another 59,000 jobs that facilitate purchase of UK imports by China would also be affected but this will impact intermediary firms that do these activities and not employees in China. Other countries that will be impacted roughly by a no-deal Brexit are Ireland and Malta as around 1 in 7 people will be affected.
The prospects of no-deal Brexit situation are high as parliamentarians of Britain recently rejected a draft agreement proposed by PM Therese May’s government between UK and European Union. Britain will no longer be a part of the EU that comprises of 28 nations located in Europe on March 29. The study used World Input Output Database to estimate the effect on employment of people across the globe if there is a hard Brexit. Under that situation Britain would have to give up legal regulations of EU and also will not be able to participate in its single market and would have to then engage in trade regulations of WTO to continue trading with its existing partners.