EPC: The implications of a no-deal Brexit for the EU

29 October 2020

As the end of the transition period nears, the EU must prepare for a fundamentally different and more conflictual relationship with the UK.

Whatever the outcome of the Brexit negotiations, there will be profound economic, political and geopolitical implications for the EU.

While the EU as a whole might be better placed than the UK to absorb the economic shock of a no-deal, the fallout within the EU will be uneven, resulting in winners and losers. The asymmetrical impact and differential capacity and willingness of national governments to mitigate the shock could exacerbate regional disparities and unbalance the EU’s internal level playing field. As such, it might become more difficult to maintain the same level of EU unity post-no-deal.

The EU-UK relationship can be expected to become more conflictual and competitive,  particularly in the absence of common rules under a no-deal. Regardless of whether a deal is reached, the UK government’s willingness to breach international law is likely to have a lasting effect on trust and has brought an element of precariousness into the relationship. This lack of trust and predictability will also affect the EU’s and UK’s ability (and willingness) to amplify the other’s voice in the geopolitical and security sphere.

All these negative repercussions will be intensified should the talks end in an acrimonious divorce. In any case, the potential for a no-deal by accident or design remains high. The only way to secure a deal at this point is for Boris Johnson to make a double U-turn on his red lines and the Internal Market Bill. Nevertheless, even so, the deal would be a thin and precarious one with low levels of trust, while the threat of further treaty breaches would impede the normalisation of the EU-UK relations. The EU, therefore, must anticipate a much more conflictual and difficult relationship, no matter the eventual outcome.


Read the full paper here.

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