During the 30th edition of the Workshop “The outlook for the Economy and Finance” a paper – by The European House – Ambrosetti – about impacts and implications of a hard Brexit, an increasingly uncertain path, was presented.
This paper sets out to continue the analyses of Brexit scenarios and to pick up on the in-depth examination which began in September 2017 with the Lettera Club “Brexit one year later: main implications and proposals to manage the transition underway” presented during the 43rd Edition of The European House – Ambrosetti “Intelligence on the World, Europe and Italy” Forum and updated initially during the 29th Edition of the “Outlook for the Economy and Finance” Workshop and then for the 44th Edition of The European House – Ambrosetti “Intelligence on the World, Europe and Italy” Forum.
In the nearly three years that have passed since June 23, 2016, there have been many, often conflicting, developments. Until now, there have been alternating moments of optimism and pessimism, together with the taking of contrasting political stances, leading to polarization between those in favor of a “Hard Brexit”, and those of a “Soft Brexit”. The former would make a clean break between the United Kingdom and the European Union without any sort of regulatory agreement to ease the transition, while the latter would be the result of successful negotiations, intended to create a regulatory framework that would lessen as much as possible the impact of the United Kingdom’s exit from the EU.
At the moment, neither of the two sides has won out definitively over the other, despite the fact that on March 13 the British Parliament voted to exclude the possibility of exiting the EU without a negotiated settlement (which, in fact, would be the equivalent to the hardest Brexit) with 321 votes in favor and 278 against and despite the March 29, 2019 deadline. The date initially set for the United Kingdom to depart from the EU came and went without a valid Withdrawal Agreement approved by British MPs.
What is certain is that the significance of the event is vast and brings unprecedented features. Over the last three years, it has, in fact, monopolized the agenda of the British government and initiated discussion among Member States on the future direction of the EU. Until now, what has dominated is uncertainty. A clear definition of the future relations between the United Kingdom and the European Union has yet to be reached. And, above all, this has had a negative impact on the choices and outlooks of businesses and individuals.
In this rapidly evolving scenario, the aim of this paper is to offer an exhaustive framework capable of providing a clear focus on the Brexit phenomenon and quantifying the extent of the major impacts of the United Kingdom’s exiting the EU. This would help business leaders to navigate their way through the transition under way and to make informed choices for the short- to medium-term.
Managing Partner and Chief Executive Officer,
The European House - Ambrosetti