Reply to: Just looking at Hard Brexit from the EU perspective...

[northernladyuk]

Good point, well made. I should, of course, have used 21% & 21%. Apologies for the typo.

As net contribution is the amount of money entering the EU coffers from an individual country, maybe I should have compared net contribution with taxation raised by HMRC.

So that would be just shy of 700 billion in 2015/16. Maybe people would notice if this fell by 150 billion?

https://www.economicshelp.org/blog/4...sources-in-uk/

FFS - how can you think a reduction in national GDP is comparable to a reduction in net contributions to the EU?

[meridian]

This is how it will work , we export 250 Billion in goods to EU , and with an average 10% tariff that will give the respective importing EU countries another 25 Billion, far more than the 8 Billion needed.

The EU will put up the positive subscribers by 8 Billion but they will still be quids in , er sorry Euro's in on the whole deal as import duties are paid to the country of import.

Now you might say that will cost the EU more and they won't put up with that, but you would be wrong as they have to pay for our exports in pounds and as thats worth 20 % less so a 10 % tariff will still make the UK exports 10 % cheaper to them.

Also a hard Brexit will mean the pound going down further , predictions are around the dollar parity so even better for our EU friends, so hard Brexit and a worthless pound is the preferred choice.

Not quite. Although total trade to the EU is 240-250bn, 80% of this is services. You'll also need to take into account EU trade with the U.K.

So a possible outcome there is a surplus in tariff income to the U.K. in trade of goods, but a marked reduction in service trade. Much of that service trade would then be performed in the EU, thus giving a boost to the EU economy.

Given the imbalance in trade of goods, a trashing of the pound doesn't suit anyone - the EUs exports will be more expensive to us, we'll buy less (doesn't suit the exporters) and they'll cost us much more (doesn't suit us as consumers).

[motoukenin]

Can somebody please confirm my understanding. I've been looking at the figures here: Net contributors to the budget? / EU Information Centre - Home

As far as I can see, total net contributions in 2014 were around 41.8 billion Euro, of which the UK contributed 8.6 billion, or 21% of the total.

So, in the event of a Hard Brexit, what plans have the EU put in place to deal with an instant 21% budget cut? When faced with this scenario, why would the EU threaten Britain with a Hard Brexit?

I don't think the UK is expecting a drop in GDP of 20% in the event of hard Brexit, is it?


Can somebody clarify without name calling, please?

This is how it will work , we export 250 Billion in goods to EU , and with an average 10% tariff that will give the respective importing EU countries another 25 Billion, far more than the 8 Billion needed.

The EU will put up the positive subscribers by 8 Billion but they will still be quids in , er sorry Euro's in on the whole deal as import duties are paid to the country of import.

Now you might say that will cost the EU more and they won't put up with that, but you would be wrong as they have to pay for our exports in pounds and as thats worth 20 % less so a 10 % tariff will still make the UK exports 10 % cheaper to them.

Also a hard Brexit will mean the pound going down further , predictions are around the dollar parity so even better for our EU friends, so hard Brexit and a worthless pound is the preferred choice.

[Whorty]

Don't mind Brillo - he's a cretin.

As is shaun. Best ignore the idiots.

[meridian]

Just looking at Hard Brexit from the EU perspective...

Good summary. It was only the first of your two questions that I was asking, though.

My personal view (not part of the debate in this thread) is that, utimately, the EU will fail, and so your second point becomes moot. I was just contemplating how much of an immediate budget cut the EU would face in the event of a Hard Brexit.

Google appears to suggest that the budget cut is not immediate. One of the three questions currently being worked through is the "divorce payment", which includes the UK contributions to financial commitments up until the end of the current EU budget period in 2020. After that, the other 27 countries will be on their own.

Between now and then, the EU will collectively need to rebudget for the following 5 years. With nothing else changing, there would be a shortfall of 12-15bn Euros, which used to be 9-12bn GBP but is now closer to parity (interesting sidebar - does the simple act of Brexit and the resulting movement in currency mean that our bill has gone up by 20%?). The total budget is around 1% of EU GDP.

The EU is still considering how to manage the change. It may remove rebates from other members, ask for increased contributions (effectively the same thing), change core policies such as the CAP, etc.

Part of the budget is spent on common activities such security and anti-terrorism, etc, so its probable that the UK will be asked to contribute for these.

[AtW]

Good summary. It was only the first of your two questions that I was asking, though.

My personal view (not part of the debate in this thread) is that, utimately, the EU will fail, and so your second point becomes moot. I was just contemplating how much of an immediate budget cut the EU would face in the event of a Hard Brexit.

EU budget will increase

HTH

[RetSet]

Wot? You're making the "lack of name calling" request very difficult...

The pointing out of your comparison wasn't that you used 20% instead of 21%, but that you were comparing a contribution to a fund to an entire GDP.

You appear to be conflating two separate questions:
1. Where will the reduction in the UKs contributions be made up from in the future;
2. Does the UK currently receive more in economic benefit back from our relationship of being within the EU than the £8bn-odd that we put in.

Good summary. It was only the first of your two questions that I was asking, though.

My personal view (not part of the debate in this thread) is that, utimately, the EU will fail, and so your second point becomes moot. I was just contemplating how much of an immediate budget cut the EU would face in the event of a Hard Brexit.

[meridian]

Good point, well made. I should, of course, have used 21% & 21%. Apologies for the typo.

As net contribution is the amount of money entering the EU coffers from an individual country, maybe I should have compared net contribution with taxation raised by HMRC.

So that would be just shy of 700 billion in 2015/16. Maybe people would notice if this fell by 150 billion?

https://www.economicshelp.org/blog/4...sources-in-uk/

Wot? You're making the "lack of name calling" request very difficult...

The pointing out of your comparison wasn't that you used 20% instead of 21%, but that you were comparing a contribution to a fund to an entire GDP.

You appear to be conflating two separate questions:
1. Where will the reduction in the UKs contributions be made up from in the future;
2. Does the UK currently receive more in economic benefit back from our relationship of being within the EU than the £8bn-odd that we put in.

[RetSet]

In what way can you consider that a reduction in net contributions to the EU of 21% is in any way equivalent to a 20% reduction in GDP for the UK?...

Good point, well made. I should, of course, have used 21% & 21%. Apologies for the typo.

As net contribution is the amount of money entering the EU coffers from an individual country, maybe I should have compared net contribution with taxation raised by HMRC.

So that would be just shy of 700 billion in 2015/16. Maybe people would notice if this fell by 150 billion?

https://www.economicshelp.org/blog/4...sources-in-uk/

[AtW]

It's due on Brexit day.

Morning or evening?

Ah, wait the right answer is it will NEVER arrive

[northernladyuk]

I hope they deliver it before I pay it off

It's due on Brexit day.

[greenlake]

I hope they deliver it before I pay it off

It's on its way. Have some patience....

[AtW]

But in five years you will have paid off DFS.

I hope they deliver it before I pay it off

[northernladyuk]

"You can claim the relief for a maximum of five consecutive years starting with the year you are first entitled to the relief."

No thanks...

But in five years you will have paid off DFS.

[jamesbrown]

"You can claim the relief for a maximum of five consecutive years starting with the year you are first entitled to the relief."

No thanks...

Also, it sunsets (2020?) and they've been talking about scrapping it for ages IIRC.

Ireland is a high-tax economy for SMEs / entrepreneurs / contractors. Low tax if you're a card carrying, profit shifting, scumbag megacorp. Which is nice.

The expat tax scheme in Denmark is better (also time limited though).