2 September 2019 Economics Brexit and the EU Eurozone Implications of 'no deal' for the eurozone The clear gap between the UK and EU negotiating positions means a 'no deal' Brexit is a real possibility While we do not think a disorderly Brexit will cause a recession in the eurozone, nor even in Ireland… …it would likely weigh on already lacklustre growth prospects and could raise calls for the ECB to scale up QE 'No deal' a real possibility UK Prime Minister Boris Johnson has pledged to leave the EU 31 October "do or die". As we outline in a box on page 4, we see little incentive for the EU to meet Mr Chris Hare Johnson's demand to remove the Northern Ireland 'backstop', meaning the prospect of Economist a deal still looks fragile. And, with limited time for the UK Parliament to block 'no deal', HSBC Bank plc
[email protected] it is perhaps unsurprising that the bookmakers see a roughly 40% chance of it. +44 20 7991 2995 Fabio Balboni What would a potential 'no deal' look like? Senior Economist It is impossible to predict the precise arrangements that would be established HSBC Bank plc
[email protected] between the UK and the EU under a potential 'no deal'. But on the whole, we follow +44 20 7992 0374 the 'disorderly no deal' assumptions outlined in our 'no deal' analysis of the UK Chantana Sam (Brexit Strategies: No deal for real? 27 June 2019). This includes immediate trade Economist HSBC France tariffs and trade disruption relating to border checks, but more benign transition
[email protected] measures for (financial) services trade.