British economist Roger Bootle has claimed the EU is already feeling the effects of Brexit, as the EU27 failed to reach an agreement on the terms of the bloc’s next long-term budget last week. The chairman of Capital Economics also warned if the UK leaves the EU without a trade deal in place, Brussels may come under intense pressure to reform. He said Britain’s departure will either force reform or, if the bloc resists, “the EU is doomed”.
Writing in the Daily Telegraph, Mr Bootle said: “Brexit will make it more difficult for the EU to survive.
“As we saw last week, the absence of the UK’s budget contributions is causing a major problem. No member country is rushing to pay more.
“Meanwhile, the absence of the UK alters the political balance between the membership and is making the traditionally prudent northern countries increasingly worried about the future.”
The economist also hit out at the EU’s insistence that the UK must remain tied to EU rules and regulations, under the so-called “level playing field” mechanism.
Mr Bootle said such a move would be an “economic danger” for the UK and suggested the proposal was to make an example of Britain – and make leaving the bloc “an unattractive prospect for other members”.
However, the economist warned there was a major flaw in this approach.
He said: “Suppose the UK does not buckle. It does not concede regulatory alignment and leaves without a trade deal and yet does pretty well, continuing to outgrow EU members…
“It would then be extremely difficult to argue that countries faced economic disaster if they left the EU.”
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Mr Bootle said if the UK does end up leaving the bloc without a deal, the pressure will mount on the bloc to reform.
He said he had always believed the best way to initiate reform of the EU was once Britain had left the bloc.
The economist said: “I thought that our chances of reforming the EU were greatest through leaving it, succeeding outside it and letting the forces of competition do the rest.
“Either this would force reform, or the EU was doomed.”
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Britain will start official talks with the EU on March 3, but the two sides look set to clash as Brussels’ is insistent the UK must abide by current EU environmental and labour market rules.
Boris Johnson has repeatedly affirmed Britain’s desire to break free from EU rules and said such a demand was unacceptable.
Yet the EU has so far indicated little lee-way on the matter.
The UK will publish its official negotiation mandate on Thursday, ahead of next week’s crunch talks.
Negotiations have already taken a sour turn, as France’s European Affairs Minister Amélie de Montchalin warned the Prime Minister the EU will not be pushed into a “bad deal” just to ensure Mr Johnson is able to keep true to his pledge.
Ms de Montchalin insisted the bloc will ensure their “fishermen, farmers and business” are protected under the new agreement as she said she will “make clear” to British business what they are set to lose should the Government fail to find common ground with Brussels.
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