Depending on which news source you read, the prospect of a no-deal Brexit is expected to impact on Portugal’s economy by anything from 0.6% to 1.6%.
The differing forecasts are given today by Jornal Económico (“0.6% by 2021”), Dinheiro Vivo (“1.6% over the next few years”) and ECO online (1% by 2021).
The only aspect they are all agreed upon is that a no-deal won’t help Portugal financially.
All three reports are interpretations of forecasts given by the Bank of Portugal – which, one could argue, may not have its sums right anyway.
But with the no-deal scenario now looking a lot more likely than it did yesterday, newspapers in Portugal are running with the ‘doom and gloom’ of what it could all mean.
Said the bank, Britain is Portugal’s most important partner outside the eurozone, and any “disordered withdrawal’ from the European Union “would have a significant impact on external demand, with a reduction of British imports”.
The bank’s note continues that the reduction of exports “implies a decrease in demand for productive factors” which would lead to a “reduction in investment and a slight decrease in employment and consequently in private consumption”.
Only Dinheiro Vivo explains this is the “worst of all possible scenarios” – as elsewhere the government has been at pains to stress that whatever happens there is no chance of any further negotiations with the EU over Britain’s withdrawal.
Speaking in Malta today as he takes part in the 6th South EU summit, prime minister António Costa said there is absolute consensus among member states over the need for an orderly UK exit.
But if it doesn’t transpire, the UK has got to understand that it “cannot transfer (its) internal political problems to Europe”.
Brussels too has reiterated that whatever happens, the UK must pay the £39 billion divorce bill – without which no future negotiations on trade with the EU could move forwards.