British Prime Minister Theresa May’s divorce deal with the European Union was overwhelmingly rejected by Parliament on Tuesday, losing by a 230-vote margin. Now, with the E.U. firm in its refusal to renegotiate that deal, it is looking more likely that Britain will leave the bloc in March without a deal in place.
While support for such a move is growing among some hard-line Brexiteers, others believe a “no deal” Brexit would be disastrous. “No-deal is a catastrophe,” said Peter Kellner, a visiting scholar at the Carnegie Endowment for International Peace and former president of the online survey research company YouGov.
Without a plan in place, the country could find itself unable to import or export goods to E.U. countries. Its planes and trains could be prevented from traveling to the European Union without onerous regulations, as might its citizens. But the European Union would suffer from a no-deal withdrawal, too.
“Europe doesn’t want a no-deal Brexit because; while it would be catastrophic for Britain, there are European businesses that would be affected,” Kellner said. “Motor industries, pharmaceuticals. There are a whole host of industries where parts flow between E.U. countries and Britain.”
In July, the International Monetary Fund warned that while Britain would bear the brunt of the economic losses, a hard Brexit would cause the E.U.’s economic growth to fall by as much as 1.5 percent by 2030.
“It’s hard for me to see how [no deal] would benefit the E.U. at all,” said Amanda Sloat, a senior fellow at the Brookings Institution. “By nature of the single market, you’ve got a heavily integrated economy that would come to a screeching halt.”
The United Kingdom is one of the European Union’s three largest trading partners, making up 13 percent of its trade in a bloc that imposes no barriers.
“The strength of euro area-UK integration implies that there would be no Brexit winners,” the IMF said in July, according to the Guardian.
Sloat said that, in addition to trade, a hard Brexit runs the risk of being immediately financially detrimental to the European Union. If Britain leaves without a deal in hand, it’s possible it won’t pay its “divorce bill” of about $51 billion. In December 2017, Britain agreed to pay that sum to cover the costs of leaving.
But in September, May and then-Brexit negotiator Dominic Raab suggested they may not pay up if no deal is met.
Perhaps most concerning to Europe, should the U.K. crash out of the bloc, would be the issue of borders. More than 3 million E.U. citizens live in the United Kingdom, while more than 1 million Britons live in the European Union. With freedom of movement within the European Union, British and E.U. citizens can move in and out of their nation states. A hard Brexit would create major confusion around who can stay and under what circumstances.
Even so, it’s unlikely the bloc will renegotiate any legally binding parts of the failed withdrawal agreement. Reopening the 585-page agreement runs the risk of allowing 27 individual nation states to readdress their qualms with it.
This post was updated following the British Parliament’s vote on May’s Brexit deal.