Will EU citizens be affected after Brexit?

Brexit effects: The consequences of leaving the EU for the UK, Germany & the EU

Düsseldorf For years, the Brexit debate dominated the daily news in Great Britain. Now it is done. England is no longer part of the European Union. The country officially left the country on January 31, 2020. But there was a transition phase that ended at the end of 2020. Politicians, companies and the population should prepare for the exit. But it turned out differently. Shortly before, representatives of the EU and British Prime Minister Boris Johnson were able to agree on a deal.

It was too late for many companies. Since mid-December 2020, there has been chaos at the borders, as can be seen in the long truck traffic jams in Dover, which have become a kind of symbol of the Brexit policy.

At the same time, the economy is suffering heavily from the corona pandemic - the consequences of Brexit at a glance.

Brexit consequences for Great Britain, Germany and the EU

Consequences of Brexit for delivery traffic

Despite the Brexit trade agreement, German industry is currently seeing significant disruptions in the transport of goods to and from Great Britain. "We expect that the bottlenecks will last at least until half of the year," said the chief executive of the Federation of German Industries (BDI), Joachim Lang, the German press agency.

“This dramatically puts the pan-European supply chains to the test. The preparations by the government in London and in many British companies have not been sufficient to cushion the additional bureaucracy and unnecessary border formalities. "

Although companies had prepared well for the new trade barriers last year despite Corona, the disruptions hit many companies with great severity, said Lang. “At the moment, trade has initially shrunk. As soon as the trading volume increases, we are facing a massive stress test. "

Consequences of Brexit for Export

German exports to Great Britain fell by almost a third in January after the Brexit trade agreement came into force. According to preliminary calculations, exports have fallen by around 30 percent compared to the same month last year, as the Federal Statistical Office announced. The reason for this is "the effects of the completed Brexit".

German exports to the United Kingdom had already slumped by 15.5 percent to 66.9 billion euros in 2020, mainly due to the corona pandemic. That was the biggest minus since the financial and economic crisis in 2009. "Since 2016 - the year of the Brexit referendum - German exports to the United Kingdom have steadily declined," according to statisticians. In 2015, German exports there amounted to 89.0 billion euros.

The German Chamber of Commerce and Industry (DIHK) assumes that German companies will have to submit around ten million customs declarations per year in the future. That alone should cost around 400 million euros.

Consequences of Brexit for Small Businesses

The country's exit from the EU means a radical break for British companies. You have to reposition yourself - or give up the business across the English Channel entirely. The many small losses add up to economic damage that, according to the Bank of England, will cost the country four percentage points of growth in the long term.

A quarter of the six million small businesses in the UK export to the EU. Many have stopped their online sales for the time being because they do not want to bear the additional costs caused by customs duties themselves, nor do they want to pass them on to their customers.

These include the Cheshire Cheese Company from Macclesfield. The health certificates alone are regularly more expensive than the value of the cheese sold. The company is now considering setting up a distribution center in the EU to circumvent the internal market hurdles. The EU has summarized in a PDF what exactly applies now.

Consequences of Brexit for the financial sector

The UK wants to relax listing rules to increase the number of issues from high-growth companies and shell companies (SPAC, Special Purpose Acquisition Company) in London after Brexit. As Finance Minister Rishi Sunak announced at the beginning of March, for example, the listing requirements for SPACS are to be liberalized. Spac is a stock market trend from the USA. You can find out how it works in this explanation.

In addition, the free float could be reduced to 15 percent. Different classes of shares are also recommended.

The London Stock Exchange has been under increased competitive pressure from the New York Stock Exchange and Nasdaq as well as Euronext since the UK left the European Union in late 2020. The City of London is fighting the Exodus.

Because British financial institutions have to send more employees to their branches in the EU. Some of the institutes that want to do business in the international community after Brexit still do not have enough employees on site, said ECB chief bank guard Andrea Enria.

It was recently heard from some financial institutions that it would be difficult to move employees to the EU due to travel restrictions due to the pandemic.

With the country's final exit from the EU after the end of the transition period, British banks were no longer able to do business in the international community with the help of the so-called EU passport from the City of London. Financial services are not covered by the new EU-UK trade agreement.

Consequences of Brexit for the automotive industry

Due to the corona pandemic and the consequences of Brexit, car production in Great Britain also fell sharply in January. A little more than 86,000 vehicles meant a minus of 27.3 percent compared to the same month last year, the industry association SMMT announced in February.

It was the worst January since 2009 and the 17th monthly decline in a row. Since the beginning of the pandemic in March 2020, the industry has suffered losses of 11.3 billion pounds (12.97 billion euros).

In 2019, Great Britain was still the world's largest export market for German car manufacturers. The German automotive industry has more than 100 production facilities in Great Britain, most of which are owned by supplier companies.

The British suppliers, in turn, are heavily dependent on the EU market.

Consequences of Brexit for Consumers

Life is getting more expensive for British consumers. According to experts, inflation can already be observed in food prices. Online shoppers are also surprised when the parcel delivery service at their doorstep has recently begun demanding additional payments for orders from the EU. The import sales tax of 20 percent is now due. There are also customs duties if the majority of the items were manufactured in third countries such as China, Bangladesh or Vietnam.

So supposed bargains from the EU quickly turn into expensive bad buyers. Many then let the parcel go back. “Sending individual parcels to private recipients in Great Britain continues to cause problems,” confirms a spokesman for the DPD parcel delivery service.

The corona pandemic is still hiding the full extent of the Brexit consequences. With hospitality, retail and tourism closed due to the lockdown, and with many factories operating below capacity, economic activity in the UK is significantly lower than usual. According to the logistics platform Transporeon, the freight volume across the English Channel is still around 40 percent below normal. The lower demand takes some pressure off the supply chains.

"Corona is dampening the effects of Brexit," says Shane Brennan from the Cold Chain Federation, the British association of refrigeration logistics. “If there wasn't a lockdown, we would have real delivery bottlenecks.” But as it was, the truck jams did not materialize and the supermarket shelves were filled normally. Imports are easier anyway because the British government has not yet checked the border for the first six months.

Effects of Brexit on the EU

The exit of the third largest member state is an enormous loss for the EU. It is particularly important that other member states do not follow this example. One of the main arguments in favor of Brexit is money. The United Kingdom pays the enormous sum of £ 350 million to the European Union every week, it said.

The UK was actually the second largest net contributor in the EU. However, the actual weekly sum that is transferred to the European Union is around 160 million pounds sterling - which makes up around six percent of the EU budget.

In absolute terms, Germany is the largest “net contributor” in the European Union. In recent years, Germany has paid around 10 to 15 billion euros more per year into the EU budget than flowed back directly to beneficiaries in Germany. The joint reconstruction after the corona pandemic will increase the German net contribution even further. However, the Swedes, Danes, Luxembourgers, Austrians and Dutch pay a similar amount per capita - or even more.

Impact on freedom of movement between countries

The future of EU citizens living in the UK has been clarified for the time being. If you want to live in Great Britain permanently, you can register for the EU Settlement Scheme. It applies to EU citizens, non-EU citizens and Swiss citizens as well as their relatives.

EU citizens who are deployed in the UK for an extended period of time must register for a residence permit.

This is called “pre-settled status” for the first five years, all other periods fall into “settled status”. However, there are exceptions for workers who have already resided in the UK for five years by the end of the transition period: they should be granted permanent residence immediately.

If you only travel to Great Britain as a tourist or business traveler and have German citizenship, you need up to 6 months no visa.

Who as British in Germany lives, must observe the following rules:

Since January 1, 2021, people who were entitled to stay or work in Germany (or another EU country) until the end of 2020 and who had exercised this right have essentially the same rights as before leaving. The rights are therefore "frozen". These rights exist “by law”. So people with British citizenship in Germany do not need to do anything to assert them.

In order to be able to prove that you have rights under the Withdrawal Agreement, however, you need a document that you can obtain from the immigration authorities. You can find more information on this on the BMI website.

By June 30, 2021, British citizens who live in Germany on December 31, 2020 and continue to live in Germany must report their residence to the immigration authorities responsible for their place of residence in order to be able to receive the new residence document.

The simplified access for "internally transferred employees" can also take place via the EU Blue Card. Many Brits want to save themselves this journey: 15,000 Brits have already accepted German citizenship as a result.

More:The chronology of Brexit - Britain's exit from the EU in a nutshell.