SAV Working on Scenarios of Brexit’s Ramifications

Europe House in London back in June 2016 (Photo by TASR)

Bratislava, March 29 (TASR) – The Slovak Academy of Sciences (SAV) is working on studies to enable the state administration to ready itself for scenarios involving the United Kingdom’s departure from the EU and for their possible impacts on the Slovak economy, TASR learnt from SAV spokesperson Monika Hucakova on Wednesday.

Hucakova added that work in the early stage of the study will result in a mid-term prognosis of Slovakia’s economic development.

“In regard to Brexit, a number of aspects of the process are being mentioned. The EU is well prepared in some aspects, but in others it isn’t,” said Viliam Palenik of SAV’s Economy Institute.

The EU created a working group three years ago that was devoted to addressing the funding of the EU’s budget, said Palenik. Its work under the leadership of Mario Monti produced a final report in late 2016 and early 2017 “thanks to which we now have a great many sound analyses and lines of argumentation that make the EU well prepared for inevitable changes to the income side of its budget following the loss of Britain’s payments,” said Palenik.

“But the EU27 is far from being well prepared for Brexit in terms of analysis and argumentation in other areas, which makes analysis of its ramifications difficult, but all the more necessary,” said Palenik.

Meanwhile, the Slovak central bank (NBS) estimates Brexit’s effect on Slovakia’s GDP at anywhere between 0.3-0.5 percent of GDP. However, SAV’s analysis will delve deeper, according to Mario Radvansky, one of the chief researchers in SAV’s study.

SAV’s project will explore a range of scenarios and channels whereby Slovakia’s economy may be hit by Brexit. In addition, it will consider other risks stemming from global developments, including changes to world trade in the wake of protectionist measures by the US administration.