The POSSIBLE MACROECONOMIC IMPACTS OF BREXIT IN THE EUROPEAN UNION AND IN EAST CENTRAL EUROPE
Abstract
The referendum, which was held on 23rd June 2016 about the membership of the United Kingdom in the European Union, caused political and economic uncertainty in the country and had negative impacts on the further development of integration process. However, the conservative government led by Theresa May is interested in striking a compromise on the EU’s withdrawal agreement, the main problem is that hard-liner MP’s of the Democratic Unionist Party (DUP) from Northern Ireland and the majority of tory representatives rejected the withdrawal agreement, which was signed between the United Kingdom and the European Union at the end of November 2018. The objective of my essay is to analyse the possible macroeconomic impacts of Brexit on Great-Britain and the countries of East Central Europe. Besides the evaluation of different scenarios related to Brexit, it is a crucial issue to answer which consequences might have the UK’s withdrawal from the EU on the economies of the Eurozone and the Central and Eastern European countries. As far as the trade of goods and services is concerned, exports to the UK from CEECs is negligible in terms of their GDP, but a ‘hard Brexit’ would have negative impacts on trade linkages. Because of close relationship with the Eurozone countries, one of the main problems would be the slowdown of the Euro area, which would have negative consequences on the economic outlook of the region as a whole. Because of length constraints, I will not highlight the content of the UK’s withdrawal agreement and the evaluation of British domestic politics.
