No deal Brexit would cost EU19 Jul 2018 16:34
LONDON (Reuters) - European Union countries will suffer long-term damage equivalent to about 1.5 percent of annual economic output if Britain leaves the bloc without a free trade deal next year, the International Monetary Fund said on Thursday.
The EU's lost economic output in the case of no deal would cost the bloc around $250 billion (192.52 billion pounds), according to Reuters calculations based on the IMF's estimate of the size of the EU economy excluding Britain this year.
Lost employment could total 0.7 percent of the EU workforce, or more than a million jobs.
Ireland would be worst hit due to its close trade ties with Britain, followed by the Netherlands, Belgium and Luxembourg. Germany would also suffer due to industrial supply chains.
Britain has argued it is in the EU's economic interest to take a flexible approach to Brexit, while the EU is concerned not to set a precedent of allowing a country to leave but retain the aspects of EU membership it finds beneficial.
Some British lawmakers say the country should leave the EU and trade on World Trade Organization terms - the IMF's 'no deal' scenario - if the EU makes too few concessions.
The IMF said its study showed a bigger negative impact on the EU from Brexit than some previous work, because it modelled the disruption to manufacturing supply chains as well as effect of tariffs and reduced financial services trade.