EU chiefs will be forced to mitigate a devastating economic shock to the bloc’s largest industries in the event of a no-deal Brexit, according to the report by the University of Leuven. The EU-wide economy will shrink £228billion in the immediate aftermath if leaders fail to convince Britain’s next prime minister to back Theresa May’s Brexit deal. The report, commissioned on behalf of the Flanders Department of Foreign Affairs, warns that the scenario would result in 1.2 million job loses.
Ireland, Belgium and the Netherlands would be worse affected by a no-deal Brexit, with Dublin having to compensate for a total loss of 50,330 jobs or 2.58 percent of its entire work force.
Leo Varadkar would also be forced to stomach a £9bn hit to his economy if Britain leaves the bloc without a deal.
Belgium would also suffer similar losses, with the Northern European nation losing 2.35 percent of its GDP and 42,390 jobs.
The country, famous for its beer and chocolate, is expected to see its food and drinks industry worst hit by a no-deal Brexit.
Germany and France suffer the largest number of job losses but the figures represent a smaller number of their entire populations.
Angela Merkel would be faced with 291,930 left out of work, while Emmanuel Macron a total of 141,320, according to the study.
Professor Hylke Vandenbussche, the report’s author, warned that similar studies had “underestimated” the devastation of Britain leaving the EU without an agreement.
She said the Brexiteer plan to offer EU firms tariff-free access to UK markets would do little to save European firms.
The professor warned that this would simply create “fierce competition” for EU businesses with American and Chinese competitors.
There would also be little appetite for EU chiefs to offer British firms a similar offer, she added.
Julie Bynens, the secretary-general of the Flanders foreign affairs department, said: “European supply chains will be severely damaged and may come to a halt at the UK border without a soft Brexit in place.”
She also warned that Britain will be significantly impaired by a no-deal Brexit, adding: “The EU internal market cannot simply be replaced by signing trade deals with other third partners as global chains increasingly evolve around regional hubs.”
The report claims that Britain would be hit harder than most EU countries if we leave the bloc without a deal.
According to figures, 525,000 would lose their jobs and the entire economy would take a 4.4 percent hit to its GDP.
Ms Bynens said her Flanders region of northern Belgium, would continue to support the EU’s refusal to renegotiate the Brexit deal with the next prime minister.
“It is very important for the EU and UK to have a positive relationship in the future, as ambitious as possible on both sides to limit the damage as much as possible,” she added.
Both Tory leadership contenders, Boris Johnson and Jeremy Hunt, have vowed to leave the bloc without a deal unless they can secure changes to the original offer.