Hard or soft: the Brexit is going to hurt the Dutch economy no matter what. Exactly how many billions of euros are being damaged by the additional barriers to trade, ABN Amro has outlined two scenarios for this.
The fact that the UK’s departure from the European Union is hitting the Dutch economy hard is already clear.
A hard Brexit, without a trade deal,could generate a liability of almost EUR 5 billion, quantified by Euler Hermes. After the UK itself, the Netherlands is the biggest loser in the no-deal scenario.
But even if negotiators Michel Barnier (EU) and David Frost (UK) do come to an agreement, it will cost the Dutch economy billions of euros and thousands of jobs. ABN Amro states this in a new report, which the bank wrote in collaboration with the University of Leuven.
The Netherlands would also miss more than EUR 4.5 billion compared to GDP in 2019 with a free trade agreement. If companies do not make some practical preparations, such as an export registration number, the bank even expects the amount to be even higher.
The damage would partly be caused by practical barriers to trade, such as longer queues due to border controls and additional document burden. These barriers generate additional costs, which are most likely to be recalculated in the chain. This makes EU products less attractive to the British.
And what should also take into account indirect chain effects, says ABN Amro. If the demand for German cars in the UK falls, this also affects the Dutch suppliers of car manufacturers. More than half of the EUR 4.5 billion damage would be caused by this chain effect.
Finally, with a soft Brexit almost 18,000 full-time jobs are at risk in the Netherlands. For example, the chemical and machine industries would be hit hard, as would the (financial) services.