Brexiteer Patrick Minford, an economics professor at the University of Cardiff, also tipped the UK to thrive economically once it severs ties with the bloc, suggesting the nation will emerge more competitive as a result. And he also predicted “turmoil” for the EU’s financial markets if the UK leaves without a deal in place. Prof Minford, speaking to German magazine Economy Week about the way forward, said: “Boris Johnson’s government is determined to end the transition phase at the end of the year.
“Contrary to what some Brexit opponents hope, he will not request to extend the transition phase.
“For Johnson, that would be political suicide.”
If no trade deal looked likely, and given the alternative of a further delay, Mr Johnson would walk away, to the detriment of the EU, Prof Minford predicted.
He explained: “In this case, the damage would primarily affect the EU.”
“It is not decisive for the prosperity in Great Britain that we are part of the EU single market, which isolates itself from the rest of the world, but that we conduct free trade with as many countries in the world as possible.
“If there is no agreement, the EU and the UK will levy tariffs on bilateral trade.”
The difference would come with the respective trading relationships of the UK and the EU with the rest of the world, Prof Minford said.
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He warned: “They continue to be protected by the EU’s common external tariff, which reduces pressure to cut costs and prices.
“This makes it difficult for them to survive on the British market, especially since their goods are made more expensive by British customs.
“If there is no free trade agreement between the EU and the UK, the EU will suffer the greater harm.”
Asked whether there was any risk of collateral damage to the UK’s financial sector, Prof Minford referred to ongoing row between northern and southern countries over debt mutualisation – so-called coronabonds.
He said: “The problems are more on the EU side.
“The coronavirus crisis will further increase the number of bad loans in the bank balance sheets in southern Europe, where problem loans have so far been the problem.
“The banks there are therefore dependent on the support of the ECB.