Brexit – Implications for south-east European countries

Abstract

The paper aims to identify and evaluate the risks to which the south-east European region is exposed as a result of Brexit. An exhaustive assessment of the consequences is difficult and surrounded by uncertainty related to the unknowns that will accompany the exit process itself. The potential impacts of Brexit could can be divided into two groups: (i) direct effects, deriving from the economic, trade and financial links that countries have with the United Kingdom; and (ii) indirect effects, deriving from the consequences that Brexit could have for the economies and financial markets of Europe (and beyond). The analysis concludes that Brexit will have a marginal direct impact on the economy, trade and financial sector of south-east Europe, but the region remains potentially exposed indirectly to the effects of Brexit. In the longer-term, the region stands to lose if Brexit weakens EU integration processes as a policy anchor for south-east Europe and induces a tightening of regulation with adverse effects on trade and cross-border finance. Furthermore, Brexit could jeopardise the EU itself.