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The Impact of Brexit on the EU Budget: A non-catastrophic event

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  • Ferrer, Jorge Núñez
  • Rinaldi, David

Abstract

Given that the UK is one of the largest economies in the Europe Union – with per capita income above the EU average and therefore a net contributor – there have been concerns that the country’s decision to leave the EU could strongly impact the EU budget. On closer scrutiny, however, this paper finds that the impact will be rather small due to the effects of the UK rebate and to the potential contribution the UK would be obliged to make as a condition to obtain access to the internal market. If the UK remains outside the internal market, tariff revenues would make up a considerable share of the ‘net loss’. On balance, the authors conclude that the financial savings for the UK would be negligible and the impact on member states would be manageable. They also note that the impact on the classification of regions in EU Cohesion Policy is projected to be minimal and the European Fund for Strategic Investments is not affected by changes in membership.

Suggested Citation

  • Ferrer, Jorge Núñez & Rinaldi, David, 2016. "The Impact of Brexit on the EU Budget: A non-catastrophic event," CEPS Papers 11814, Centre for European Policy Studies.
    • Handle: RePEc:eps:cepswp:11814
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    References listed on IDEAS

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    1. Swati Dhingra & Gianmarco Ottaviano & Thomas Sampson & John Van Reenen, 2016. "The impact of Brexit on foreign investment in the UK," CEP Brexit Analysis Papers 03, Centre for Economic Performance, LSE.
    2. Pierre Boulanger & George Philippidis, 2015. "The End of a Romance? A Note on the Quantitative Impacts of a ‘Brexit’ from the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 832-842, September.
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    Cited by:

    1. Peter Becker & Jörg Haas & Carsten Hefeker & Steffen Hindelang & Eberhard Eichenhofer & Christian Tietje & Susanne Wixforth & Nicolai von Ondarza & René Repasi & Klaus Günter Deutsch & Stefan Mair & G, 2017. "Die Verhandlungen zum Brexit: Finanzielle und wirtschaftliche Auswirkungen," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(11), pages 03-40, June.
    2. Oliver Mas, 2018. "Brexit No Deal: The Budgetary Impact on CAP - Greece and the EU27," Working Papers 2018-4, Agricultural University of Athens, Department Of Agricultural Economics.
    3. Gabriel Felbermayr & Clemens Fuest & Jasmin Katrin Gröschl & Daniel Stöhlker, 2017. "Economic Effects of Brexit on the European Economy," EconPol Policy Reports 4, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Svetla Boneva & Filip Petkov, 2020. "The Multiannual Financial Framework of the European Union after 2020," Business & Management Compass, University of Economics Varna, issue 3, pages 256-272.
    5. Friedrich Heinemann, 2017. "The Case for Co-Financing the CAP," EconPol Working Paper 4, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Hosoe, Nobuhiro, 2018. "Impact of border barriers, returning migrants, and trade diversion in Brexit: Firm exit and loss of variety," Economic Modelling, Elsevier, vol. 69(C), pages 193-204.
    7. Behm, Philipp, 2017. "Fiskalische Konsequenzen des Brexit," DSi kompakt 29, DSi - Deutsches Steuerzahlerinstitut des Bundes der Steuerzahler e.V., Berlin.
    8. Maria Nica & Ionut Laurentiu Petre, 2018. "A smaller union, a larger budget per member state," International Conference on Competitiveness of Agro-food and Environmental Economy Proceedings, The Bucharest University of Economic Studies, vol. 7, pages 240-248.
    9. Emmanuel Brunet-Jailly, 2021. "Introduction: How the British-exit is Impacting the European Union?," International Studies, , vol. 58(2), pages 133-149, April.
    10. Micossi, Stefano & Perissich, Riccardo, 2016. "The Brexit Negotiations: An Italian Perspective," CEPS Papers 11922, Centre for European Policy Studies.

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