The Impact of Brexit on the EU Budget: A non-catastrophic event

Wednesday, 7 September 2016
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Authors: Jorge Núñez Ferrer and David Rinaldi

Series: CEPS Policy Brief No. 347     No of pp: 8 pp

Given that the UK is one of the largest economies in the Europe Union – with per capita income above the EU average and therefore a net contributor – there have been concerns that the country’s decision to leave the EU could strongly impact the EU budget. On closer scrutiny, however, this paper finds that the impact will be rather small due to the effects of the UK rebate and to the potential contribution the UK would be obliged to make as a condition to obtain access to the internal market. If the UK remains outside the internal market, tariff revenues would make up a considerable share of the ‘net loss’. On balance, the authors conclude that the financial savings for the UK would be negligible and the impact on member states would be manageable. They also note that the impact on the classification of regions in EU Cohesion Policy is projected to be minimal and the European Fund for Strategic Investments is not affected by changes in membership.

Jorge Núñez Ferrer is Associate Research Fellow at CEPS; David Rinaldi is Research Fellow at CEPS.