Deal or no deal –
Allianz subsidiary Euler Hermes has painted a grim picture of what could be ahead if Britain gets the latter instead of a transitional arrangement.
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City A.M. report said the trade insurance company has warned of a three-year recession from 2019, with over 3,000 firms going bankrupt and the number of insolvencies rising 15% year-on-year to more than 25,000 businesses. Again, that is if no transition deal is agreed upon when Brexit negotiations end.
Exports are forecast to fall 6%, with GDP feared to contract by 1.2% instead of growing 0.9% in a deal scenario. There is also an expected 8% drop in the level of inward investment in British companies.
“The new government must endeavour to settle on a transition deal as it will be next to impossible for the UK (United Kingdom) and EU (European Union) to finalise and ratify a free trade agreement in the next two years at the same time as finalising the EU exit,” Ana Boata, European economist at Euler Hermes, was quoted as saying.
Chancellor Philip Hammond has said a transitional arrangement is necessary “to get from where we are now to whatever future arrangements we agree with the EU.”
Meanwhile, the European Insurance and Occupational Pensions Authority (EIOPA) is closely monitoring the developments linked with the Brexit negotiations.
“As regards the possible impact on the conduct of insurance supervision and insurance products, it is too early to form any firm position,” said EIOPA Chair Gabriel Bernardino in an interview with Insurance Asset Management Europe published last May.
He said UK-based insurers seeking relocation of subsidiaries in the 27 EU member states need to be subject to proper supervision.
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