The Impact of Brexit on the EU Budget: A non-catastrophic event. CEPS Policy Brief No. 347, September 2016

Núñez Ferrer, Jorge and Rinaldi, David (2016) The Impact of Brexit on the EU Budget: A non-catastrophic event. CEPS Policy Brief No. 347, September 2016. [Policy Paper]

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Abstract

Given that the UK is one of the largest economies in the Europe Union – with per capita income above the EU average and therefore a net contributor – there have been concerns that the country’s decision to leave the EU could strongly impact the EU budget. On closer scrutiny, however, we find that the impact will be rather small due to the effects of the UK rebate and to the potential contribution the UK would be obliged to make as a condition to obtain access to the internal market. If the UK remains outside the internal market, tariff revenues would make up a considerable share of the ‘net loss’. On balance, the financial savings for the UK would be negligible and the impact on member states would be manageable. Also the impact on the classification of regions in EU Cohesion Policy is projected to be minimal and the European Fund for Strategic Investments is not affected by changes in membership.

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