The United Kingdom (UK) is the leading actor and the main economic loser of Brexit. Brexit has slowed the UK’s economic growth and may reduce it by 6.7 percent during the next 15 years period (Hamza, 2021). This deceleration is the result of worsening trade and employment circumstances in the UK. However, there are other countries that have been heavily affected by the process. Most of them are united within the European Union (EU) political and economic bloc. Germany is the EU’s biggest economy and the UK’s second-largest trading partner, while the UK moved to fifth place in the list of Germany’s biggest trade partners (Bartkowiak & Ratajczak, 2019). Therefore, Germany was chosen as a country to measure the external impacts of Brexit.
From the economic perspective, there are three main domains to measure Brexit’s impact: the movement of the workforce, the trade of goods and services, and the movement of capital. There was a steady decline of German exports to the UK; those were decreasing at the average rate of -2.67 percent between 2015 and 2018, resulting in an almost 10-billion-euro difference (Bartkowiak & Ratajczak, 2019). The automotive industry of Germany was hit hardest as the result of this decline. At the same time, despite Brexit, the volume of services exported from Germany to the UK did not decrease. Regarding the movement of capital, there is a declining trend in both the UK and Germany after 2015, indicating the correlation with Brexit announcement and subsequent uncertainty in the economy (Bartkowiak & Ratajczak, 2019). Finally, regarding the movement of labor, despite the uncertainty of the Brexit period, the number of Germans working in the UK only increased. However, this trend will be reversed with new restrictions imposed by both sides starting from 2021; new specific requirements on language and income were designed and implemented (Gov.uk, 2021).
References
Bartkowiak, M., & Ratajczak, A. (2019). Brexit and the effects on Germany from an economic and social perspective. PrzeglÄ…d Politologiczny, 3, 41-58. Web.
The UK’s points-based immigration system: information for EU citizens. (2021). Web.
Hamza, W.A. (2021). To which extent did Brexit impact the British economy: Analysis of the British economy pre and post Brexit. IOSR Journal of Business and Management, 23(6), 30-36. Web.