If the European Union (EU) were to dissolve, this would mean enormous welfare losses for the Member States. In Austria, a GDP minus of 7.8 percent is imminent. This is the conclusion of a new ifo study (Institute for Economic Research, note).
Small economies such as Malta (GDP down 19.4 percent), Luxembourg (18.1 percent) and Estonia (11.8 percent) would lose the most. “If you also take into account remittances between EU countries, the welfare loss for remittance recipients such as Hungary, Lithuania and Bulgaria would almost double,” says Ifo researcher Jasmin Gröschl. Net contributors such as Germany and Sweden would lose slightly less. However, the benefits of an EU dissolution would also be smaller for them than the losses, according to the study published on Tuesday.
Internal market and customs union of the EU
The economists have also calculated the consequences of a possible dissolution of the EU’s internal market. Here, too, the small EU economies would suffer the greatest losses. For Austria there was a welfare loss of 5.6 percent.
With regard to a possible dissolution of the EU customs union, it was announced that Ireland (0.4 percent) would suffer the largest losses. However, the negative consequences would be relatively small. Luxembourg and Germany would suffer significant losses without the eurozone, while the other member states would not. The research was carried out in collaboration with EconPol Europe.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
