The Effects of Brexit on the European Union’s Economic Power and Implications on the British Economy

The Brexit procedure involved several scenarios, mainly because of the difficulties encountered during this process and of the disagreements between European Union and the United Kingdom. The British hesitation led to the three-fold rejection of the agreement by the United Kingdom, while the European Union remained as firm on the terms of the agreement. Also, the United Kingdom refused other scenarios, including the cancellation of Brexit, a new referendum, the remaining in the European Economic Area or within the customs union. Under these circumstances, the Brexit was postponed several times after March 2019, as originally planned, sparking numerous debates about the consequences of this process. The purpose of this study is to analyze the Brexit`s effects on the European Union`s economic power and on the British economy, using a quantitative approach. Estimates of these effects involve several variables, such as the economic environment, the investment attractiveness, trade and labor market, all depending on the future economic relations between the European Union and the United Kingdom. In any case, Brexit will generate positive and negative effects for both sides, affecting the way these two economies influence the international affairs. Also, the United Kingdom`s economy will be more affected by Brexit than the European one, as we believe.