June 20, 2024

Dexit: Exiting the community of nations is expensive

European Union Reading time: 2 minutes

In its platform for the 2024 European elections, the AfD calls for Germany to leave the European Union. IW has now calculated the staggering economic consequences such an exit would have.

Key statements in brief:

  • Brexit – that is, Germany’s exit from the European Union – would have caused a severe economic crisis, similar to the crisis in the United Kingdom, and thus a permanent loss of the population’s prosperity.
  • According to the IW simulation, economic output in the Federal Republic was 5.6% lower in the fifth year after the decision to leave.
  • If we add up Germany’s lost GDP over five years, the total GDP would be €690 billion.

For the detailed version

Home rule, new trade agreements, no contributions to the EU, a booming economy: against these expectations, Brexiteers have campaigned for the UK to leave the European Community of Nations. With success, because in the 2016 referendum, a small majority of Britons were in favor of separating from the European Union. At the beginning of 2020, the United Kingdom left the League of Nations. However, almost nothing remains of the many promises. Aside from the two new trade agreements with Australia and New Zealand, which do not have a significant positive economic impact, Brexit has caused significant damage to the country:

According to a current British study, it is estimated that real gross value added in the UK will be around 6% lower since the referendum by 2023 than it would have been without Brexit.

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In the long term, experts assume that the economic damage will reach more than 10 percent.

If Germany had chosen to leave the European Union in 2016, the economic output in the Federal Republic would have been approximately 690 billion euros less than it actually was five years after the decision to leave.

Although the significant loss in prosperity resulting from Brexit is soberingly documented, the AfD has included a demand for Germany to leave the European Monetary Area and the European Union in its platform for the 2024 European elections. The IW has now identified the costs that would be associated with such Exit by Germany, similar to Britain’s exit from the European Union. In order to obtain values ​​as realistic as possible, the researchers based the simulated Brexit event on the past – as with Brexit, the years 2016 to 2021 would therefore trigger a severe economic crisis and thus a permanent loss. For prosperity of the population (graphic):

If Germany had chosen to leave the European Union in 2016, the economic output in the Federal Republic in the fifth year after the decision to leave would have been approximately 5.6% lower than it actually was.

download: Download drawing (JPG). Download drawing (EPS). Download table (XLSX).

This corresponds to a loss of about 200 billion euros for 2021 alone. Over the five years combined, Germany’s lost GDP would have been €690 billion. Even if this simulation refers to past experience with Brexit, the Washington Institute researchers assume that the costs of a future Brexit will be at least similar.

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