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Düsseldorf and Cologne to suffer highest income losses in no-deal Brexit

North Rhine-Westphalia would be the German state hit hardest by income losses in the case of a no-deal Brexit, according to new research.

Düsseldorf and Cologne to suffer highest income losses in no-deal Brexit
A welder apprentice working on a piece of metal at the Butzweilerhof training centre in Cologne, one of the cities which will be hit hard by Brexit. Photo: DPA

Several studies so far have shown how Brexit will negatively affect Germany and Europe. A new one paints a similarly dismal outlook. Researchers at the Bertelsmann Foundation investigated how different regions across Europe would be affected when it comes to income losses after the UK leaves the EU.

In the absence of a withdrawal agreement between the UK and the EU, people living in EU countries (excluding the UK) would have to bear huge income losses of €40 billion euros per year, the study predicts.

SEE ALSO: 'Negative effects will occur': No-deal Brexit threatens German jobs

The authors of the report said that, unsurprisingly, the British themselves would be hit hardest in a no-deal scenario. UK citizens would suffer income losses of €57 billion per year (around €900 euros per capita).

In Germany, too, the loss of income would be high at around €10 billion per year, making it the hardest hit country in Europe after the UK. France and Italy would also see significant income losses amounting to billions of euros.

The losses are expected to be mainly driven by higher prices of goods and services as a result of tariffs that would kick in after Brexit. Currently, there are no tariffs in the EU single market.

Meanwhile, the US and China could actually benefit from Brexit. For the analysis, economists Giordano Mion of the University of Sussex and Dominic Ponattu economic expert with the Bertelsmann Foundation, analyzed data on global trade flows to predict the consequences of a Brexit.

“European value chains are negatively affected by Brexit,” said Ponattu. “This would make trade within Europe more expensive and trade with the rest of the world could become more attractive.”

SEE ALSO: Britons in Europe express anger over UK government's Brexit healthcare offer

The west and south of Germany hardest hit

In Germany, the areas in and around Düsseldorf and Cologne in the industrial region of North Rhine-Westphalia (NRW), would be affected the most in a no-deal scenario. In these areas the report authors expect income losses totaling €650 million (Dusseldorf) and €560 million euros (Cologne) per year – these figures correspond to around €126 euros per citizen per year.

NRW is Germany’s top industrial region and hosts 37 of Germany's top 100 corporations. It also has a significant small and medium business sector.

The government districts of Upper Bavaria (including the greater Munich area) would follow with an expected loss of €526 million euros per year (€115 euros per capita) in income. 

An Audio logo in Ingolstadt, Bavaria. Photo: DPA.

According to the authors, Upper Bavaria could cushion the Brexit losses better than NRW. That's because there are global players such as Audi in Ingolstadt and BMW in Munich, for whom trade with China and the USA is much more important.

Next comes Stuttgart, also a leader in car manufacturing, where €473 million is at stake, or €116 euros per citizen.

SEE ALSO: 'They voted against my way of living': Brits in Germany on life with Brexit

Brexit good news for the world – but not Europe

According to the simulations by the researchers, US incomes would benefit from a no-deal and could rise by around €13 billion annually.

In China, incomes could rise by around €5 billion annually, while in Russia a slight increase of around €260 million annually would be expected due to Brexit.

Withdrawal agreement makes a huge difference

Meanwhile, if there is a withdrawal agreement when the UK leaves the bloc, the outlook would be significantly better.

The authors said this could halve the loss of income for Germany to €5 billion compared to the no-deal scenario. In the UK, the losses would be around €32 billion. The whole of the EU, excluding the UK, would see annual income losses of around €22 billion if there is a deal in place, the report predicated.

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BREXIT

OPINION: Pre-Brexit Brits in Europe should be given EU long-term residency

The EU has drawn up plans to make it easier for non-EU citizens to gain longterm EU residency so they can move more easily around the bloc, but Italy-based citizens' rights campaigner Clarissa Killwick says Brits who moved to the EU before Brexit are already losing out.

OPINION: Pre-Brexit Brits in Europe should be given EU long-term residency

With all the talk about the EU long-term residency permit and the proposed improvements there is no mention that UK citizens who are Withdrawal Agreement “beneficiaries” are currently being left out in the cold.

The European Commission has stated that we can hold multiple statuses including the EU long-term permit (Under a little-known EU law, third-country nationals can in theory acquire EU-wide long-term resident status if they have lived ‘legally’ in an EU country for at least five years) but in reality it is just not happening.

This effectively leaves Brits locked into their host countries while other third country nationals can enjoy some mobility rights. As yet, in Italy, it is literally a question of the computer saying no if someone tries to apply.

The lack of access to the EU long-term permit to pre-Brexit Brits is an EU-wide issue and has been flagged up to the European Commission but progress is very slow.

READ ALSO: EU government settle on rules for how non-EU citizens could move around Europe

My guess is that few UK nationals who already have permanent residency status under the Withdrawal Agreement are even aware of the extra mobility rights they could have with the EU long-term residency permit – or do not even realise they are two different things.

Perhaps there won’t be very large numbers clamouring for it but it is nothing short of discrimination not to make it accessible to British people who’ve built their lives in the EU.

They may have lost their status as EU citizens but nothing has changed concerning the contributions they make, both economically and socially.

An example of how Withdrawal Agreement Brits in Italy are losing out

My son, who has lived almost his whole life here, wanted to study in the Netherlands to improve his employment prospects.

Dutch universities grant home fees rather than international fees to holders of an EU long-term permit. The difference in fees for a Master’s, for example, is an eye-watering €18,000. He went through the application process, collecting the requisite documents, making the payments and waited many months for an appointment at the “questura”, (local immigration office).

On the day, it took some persuading before they agreed he should be able to apply but then the whole thing was stymied because the national computer system would not accept a UK national. I am in no doubt, incidentally, that had he been successful he would have had to hand in his WA  “carta di soggiorno”.

This was back in February 2022 and nothing has budged since then. In the meantime, it is a question of pay up or give up for any students in the same boat as my son. There is, in fact, a very high take up of the EU long-term permit in Italy so my son’s non-EU contemporaries do not face this barrier.

Long-term permit: The EU’s plan to make freedom of movement easier for non- EU nationals 

Completing his studies was stalled by a year until finally his Italian citizenship came through after waiting over 5 years.  I also meet working adults in Italy with the EU long-term permit who use it for work purposes, such as in Belgium and Germany, and for family reunification.  

Withdrawal agreement card should double up as EU long-term residency permit

A statement that Withdrawal Agreement beneficiaries should be able to hold multiple statuses is not that easy to find. You have to scroll quite far down the page on the European Commission’s website to find a link to an explanatory document. It has been languishing there since March 2022 but so far not proved very useful.

It has been pointed out to the Commission that the document needs to be multilingual not just in English and “branded” as an official communication from the Commission so it can be used as a stand-alone. But having an official document you can wave at the immigration authorities is going to get you nowhere if Member State governments haven’t acknowledged that WA beneficiaries can hold multiple statuses and issue clear guidance and make sure systems are modified accordingly.

I can appreciate this is no mean feat in countries where they do not usually allow multiple statuses or, even if they do, issue more than one residency card. Of course, other statuses we should be able to hold are not confined to EU long-term residency, they should include the EU Blue Card, dual nationality, family member of an EU citizen…

Personally, I do think people should be up in arms about this. The UK and EU negotiated an agreement which not only removed our freedom of movement as EU citizens, it also failed to automatically give us equal mobility rights to other third country nationals. We are now neither one thing nor the other.

It would seem the only favour the Withdrawal Agreement did us was we didn’t have to go out and come back in again! Brits who follow us, fortunate enough to get a visa, may well pip us at the post being able to apply for EU long-term residency as clearly defined non-EU citizens.

I have been bringing this issue to the attention of the embassy in Rome, FCDO and the European Commission for three years now. I hope we will see some movement soon.

Finally, there should be no dragging of heels assuming we will all take citizenship of our host countries. Actually, we shouldn’t have to, my son was fortunate, even though it took a long time. Others may not meet the requirements or wish to give up their UK citizenship in countries which do not permit dual nationality.  

Bureaucratic challenges may seem almost insurmountable but why not simply allow our Withdrawal Agreement permanent card to double up as the EU long-term residency permit.

Clarissa Killwick,

Since 2016, Clarissa has been a citizens’ rights campaigner and advocate with the pan-European group, Brexpats – Hear Our Voice.
She is co-founder and co-admin of the FB group in Italy, Beyond Brexit – UK citizens in Italy.

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