03 Mar 2017

Economical Tsunami Hits Small EU Countries After Brexit

Brexit will hit hard the economies of small European countries like Cyprus, Malta, Ireland and Luxemburg, according to Yael Selfin, chief economist of KPMG. Selfin points out that these countries have large trades with the UK in many business fields and is crucial to them to secure a good deal during the negotiations.

Another study done by Centre for Economic Policy says Cyprus, Malta and Ireland are importing big amounts of UK goods, but are almost invisible in the UK market. Ireland tops this with 14.1% of imports coming from Britain. Bigger countries like Germany and France import only 3.5% of UK goods.

The EU countries which will be the least affected from Brexit are some of the newest members like Bulgaria, Romania, Slovenia as well as traditionally more self-sustainable economies like Finland, Sweden or Italy, Selfin reported.

However, Selfin points out that the departure of workers returning back to their countries will have a positive effect on the local economy of small countries like Cyprus and Malta. On the other side, there are countries like Hungary, Croatia, Latvia, Bulgaria and Lithuania where significant part of their Gross Domestic Product (GDP) depends on money sent by immigrants working in the UK. These countries “could be hit harder”, according to Selfin.

According to her, for most of the Eastern European countries protecting this flow of remittances will be most important, while for Luxemburg, Malta and Cyprus will be important to keep the current number of British expats living on the island.

Currently the largest amount of UK citizens lives in Spain – over 300.000. The Southern country is especially a popular destination for retired Brits who buy relevantly cheap properties and enjoy the sunny weather. France has 185.000 UK expats and is popular among people over 65. Ireland has 250.000 and Germany 100.000 UK immigrants. These places are mostly attractive because of the variety of job opportunities.

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