Research

“The risk for the British if they ally themselves too closely to Trump is that they will give the impression that Britain and the US are now very much of the same mindset,” says Ian Bond of the Centre for European Reform. “They will look like two nations that are prepared to back out of international treaties, [are] committed to heavy deregulation, to maintaining low tax economies and courting the current wave of populism in their nations.”

The UK has imposed a diversion of effort upon its partners at an exceptionally testing time. It has undermined the credibility of a project viewed as existential by many of its members, including its most powerful ones. Brexiters have poured ridicule and scorn on the whole venture. Now they imagine the UK can refuse the EU’s terms for an amicable divorce and yet still count upon active and enthusiastic co-operation in ensuring the smooth flow of trade. The idea of “no deal” is just ridiculous [writes John Springford and Simon Tilford of the Centre for European reform].

John Springford and Simon Tilford of the Centre for European Reform argue, there are three ways in which a “cliff edge” Brexit would severely damage the UK economy. EU tariffs would immediately be payable on imports from Britain, averaging about 4 per cent but varying hugely. British car exports would face a 10 per cent tariff. This would be hugely damaging for the motor industry, which relies on components crossing borders many times before a vehicle is assembled.

As the Centre for European Reform (CER) argued last week, it would also mean: UK pharmaceutical and chemical companies losing EU product approval across the continent; UK-based airlines seeing flights to EU member-states grounded; and City financial firms losing their passporting rights. The economic consequence of this kind of train-crash, no-deal Brexit – potentially far more damaging than a negotiated transition even to trading on World Trade Organisation terms – could be a fall in GDP of as much as 5.5%.

Sophia Besch, a research fellow with the Centre for European Reform, has been tracking the Twitter chatter and tells DW it's been very interesting to see "who is alarmed and who isn't". Besch believes that despite the transatlantic nature of her remarks, Merkel was aiming squarely at German voters.

As the Centre for European Reform spelled out in a briefing paper last week, the consequences of leaving the EU single market and customs union in 2019 without a new trade deal, or at least a transitional trading arrangement giving us time to conclude such a deal, would be utterly disastrous.

Why the costs to the UK economy of failing to strike a deal with the EU would dwarf those of signing up to a bad deal, from John Springford and Simon Tilford of the Centre for European Reform.

The implications for individual countries could be momentous, particularly for those outside the eurozone. Mishandled, as Agata Gostynska-Jakubowska and Christian Odendahl note in a new report for the Centre for European Reform, this process could increase divisions between member states and even lead to further disintegration.