Despite a trade deal being made in December to ensure tariff-free trade after Brexit, trade between the EU and UK has fallen sharply this year.
Because of this, the EU has approved an emergency fund of €5.4 billion for both public and private businesses. The money would help businesses cover the short-term costs and other effects of the UK’s departure from the European Union.
According to the European Council, which represents the national governments of each EU member state, the reserve funding should compensate for Brexit-related losses.
The plan was adopted on Tuesday and requires EU countries to set aside at least €238 million euros for fisheries, even if it means spending more than their allowances towards the sector.
The financial impact of Brexit
The UK’s exit from the EU has affected many parts of the European economy. Some of the key changes include:
- Customs checks and declarations on goods, which is a barrier to trade and has caused some disruption to supply chains.
- VAT is now due on imports and these will now need to meet different standards.
- The Northern Ireland border is a big concern. Border controls will be introduced with the rest of the UK to keep an open border with Northern Ireland.
- Changes to fishing rights and quotas – the changes to fishing quotas are one of the biggest risks of Brexit. According to the European Commission, EU fisheries are facing a 25% decrease in their catch value from UK waters.
EU countries will be assigned a certain amount of funding, depending on the financial losses they face. Ireland, which is the only European country to share a land border with the UK, will receive €1.1 billion. France will receive €735 million in support.
Additionally, UK companies affected by the economic shock of Brexit may be able to claim support through the British government’s own programs.
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