Brexit would hit the Dutch economy hard

PTI The Hague | Updated on January 20, 2018 Published on June 09, 2016

The Netherlands will be hit hard if Britain leaves the EU, a Dutch government thinktank warned today, predicting a possible 1.2-per cent fall in GDP by 2030.

Britain, though, would be affected even more, it said, adding that London could take “years” to re-forge its trade ties with the European Union if it pulled out of the 28-nation bloc.

“If the United Kingdom withdraws from the European Union, it will affect the Netherlands more severely than other EU countries because of the strong (bilateral) trade relations,” the Central Planning Bureau (CPB) said.

The drop in trade “could amount to a GDP loss for the Netherlands of 1.2 per cent , or 10 billion euros (USD 11.4 billion), by 2030”.

And the effects could be even further heightened by less innovation which “could amplify the GDP loss of 10 billion euros by another 65 per cent.”

Britons will go to the polls on June 23 to vote in a bitterly divisive referendum.

Previous analyses have predicted the Netherlands, which lies just across the busy North Sea shipping lanes from Britain, could suffer some of the greatest fallout from a Brexit.

According to different scenarios, the drop in gross domestic product could add up to a loss of between 450 euros to 1,000 euros per person.

Production, job losses

Sectors more tightly interconnected with Britain such as chemicals, plastics, rubber and electronic equipment would bear the brunt, with production losses of up to 5.0 per cent, the report warned.

Those sectors along with the auto industry and food processing account for some 12 per cent of Dutch GDP.

That in turn could spark job losses, as well as a fall in wages, the CPB predicted, forecasting as many as 40,000 jobs could be shed across all areas.

“However, in a number of other sectors, employment would increase, such as an additional 15,000 jobs in the low-tech industry and in the sector ‘other financial services’,” it said.

But mirroring other recent reports from economic institutions, the Dutch bureau had an even starker warning for Britain.

“The UK is far more dependent on the trade with the EU than vice versa,” it said, highlighting predictions from the World Trade Organisation which said by 2030 Britain’s GDP could have fallen by 4.0 per cent.

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Published on June 09, 2016
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