Estimated impact of Brexit on Slovakia
Estimated impact of Brexit on Slovakia
According to recent studies, Slovakia is among the EU countries, which may feel the negative impact of Brexit. Our export to the UK represents over 5% of GDP, only four other EU members have higher portion. We are also at slight risk in terms of labor mobility, therefore during negotiating new terms of cooperation the emphasis has to be put on ensuring the rights of our citizens who live and work in the UK.
The British Prime Minister Theresa May has officially started the process of withdrawal from the European Union. The new relationship will need to be agreed by all 27 of the remaining EU countries and take into consideration wider issues than trade, including the movement of people and capital.
The UK has a large trade deficit with the EU (more than €83 billion, equivalent to 3.7% of GDP in 2015), and the share of UK’s total economic output destined for Europe is far greater than the proportion of European output destined for the UK. This suggests that the UK would face far greater disruption than the EU from the introduction of barriers to EU-UK trade.
Recent study1 shows the estimated impact of Brexit on foreign trade of individual EU countries. Slovakia was ranked among the countries most vulnerable to Brexit in terms of total exports and also as a percentage of GDP.
The biggest losers from tariffs (as a share of the country’s total exports) were Ireland (4.17% of total exports), Slovakia (3.27%) Spain (2.87%) and Germany (2.54%). Countries particularly exposed to the UK for exporting goods are Luxembourg (10.1% of GDP), Malta (9.1%), Netherlands (7.6%), Belgium (7.3%) and Slovakia (5.2%).
In each country different sectors will bear the brunt of any impediments to trade in goods. The most commonly used example is German car production, with one-in-seven (14%) cars made in Germany exported to the UK. Similarly €1.2 billion (14%) of France’s wine exports were destined for the UK in 2015, as were €245 million (10%) of Belgian chocolate exports, €32 million (26%) of Danish sausage and €56 million (15%) of Greek cheese1.
„It is likely that different regions will have different priorities in negotiating new agreements. For the Eastern Europe the top priority will be safeguarding the rights of workers in the UK. Countries of Western and Northern Europe are likely to be more focused on issues of foreign trade,” concludes Ľuboš Vančo, Chairman of the Partner Board KPMG in Slovakia.
 KPMG calculations based on UNCOMTRADE data.
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