Coronavirus will deal a much stronger economic blow to the EU than Brexit

In Italy in particular, but also in Greece, Spain and many eastern European countries, people feel they have been left to fight the virus on their own, writes Hamish McRae

Tuesday 23 June 2020 18:50
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The EU will this year become a smaller economy than China, whereas at the end of 2019 it was still larger
The EU will this year become a smaller economy than China, whereas at the end of 2019 it was still larger

Which is the bigger threat to the European Union: Brexit or Covid-19? It is four years since the UK voted to leave the EU and four months since the terrible toll of the coronavirus in Europe became fully evident. Deaths in Italy, the first European country to be attacked, hit their peak on 27 March.

We are still not sure of the future relationship between the UK and the EU, and the financial effort to rescue the European economy has only just begun. But there is a strong case to be made that Brexit will matter much less to the EU’s future than the blow from Covid-19.

On paper, the departure of the UK does serious damage to the EU. It has lost its second largest economy and second largest net contributor to its budget. It also means that the EU will this year become a smaller economy than China, whereas at the end of 2019 it was still larger – the EU slowdown is due to the effect of China’s faster growth and the UK’s 16 per cent of the EU’s GDP. But as the negotiations with the UK have demonstrated, Brexit has made it more politically cohesive, and since all major EU economies use the euro, more cohesive in economic terms as well.

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