Is a hard Brexit in sight?

A trench war is raging within British Prime Minister Theresa May's Conservative Party between supporters and opponents of a hard Brexit. That reports Business Insider.

The battle is likely to culminate in early October when the Conservatives gather for a congress in Birmingham. That is 2 weeks before the crucial European summit, which is scheduled for Thursday 18 October. According to British newspaper 'The Sun' Boris Johnson, the unofficial leader of the Brexiteers, wants May's current plan for a relatively soft Brexit attack hard.

In any case, the radical Brexiteers do not seem to shy away from the so-called 'no deal Brexit'. In this scenario, the European Union (EU) and the United Kingdom (UK) will revert to World Trade Organization (WTO) rules from the end of March 2019. This means that mutual import tariffs may actually be introduced.

It also means that any agreements regarding airline landing rights, drug certification and certain civil rights will expire immediately. If no solution is found, this will lead to chaos in the short term.

Damage from a 'no deal'
At least as important are the long-term consequences of a 'no deal'. One study by the IMF confirms what the consensus is among various economists: a no deal, with the UK and the EU falling back on WTO rules, is the most damaging scenario.

Uit made a chart data agency Statista shows that the UK is the biggest victim of this option, followed by the EU countries with which trade ties are strongest: Ireland, the Netherlands and Denmark. The figures mentioned in the graph relate to the estimated contraction of national income in the long term (until 2030).

For the UK this is a loss of almost 4%. Based on the figures from 2017, this involves a loss of prosperity of approximately €88 billion. For the Netherlands (based on national income in 2017), this concerns an amount of more than €8 billion.

Gold as 'insurance' against hard Brexit
Meanwhile, some Brexiteers also seem to see the prospect of the 'no deal' as an opportunity to make speculative gains. Brexiteer Steve Baker is working on behalf of a group of pro-Brexit Conservatives on a report outlining the benefits of a no-deal Brexit.

However, out registers According to the British parliament, Baker is a shareholder in the investment firm 'Glint Pay', which advertises buying physical gold as 'financial insurance' against the economic consequences of a hard Brexit. Baker has invested £70.000 in the company and made his twitter account also explicitly advertise this company.

Read more on Business Insider:
- UK government considers helping EU citizens alphabetically
- EU fears wiretapping by British spies
- Brits want final word on Brexit deal

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