Brexit and trade: without a deal there will be a boom in insolvencies

According to an analysis by Atradius, in Italy and France the increase would be 0,5%, while Spain and Germany risk more - For the United Kingdom, a no-deal Brexit would be a commercial catastrophe, with +14% insolvencies in the two-year period 2019-2020 - Manufacturing, automotive, food and chemical sectors most exposed

If London and Brussels do not find an agreement on Brexit, in Italy the number of insolvent commercial enterprises will increase by 0,5%. The calculation is by Atradius, a multinational active in the trade credit insurance and debt collection.

According to the report, to pay the heaviest bill in the event of no deal Brexit would of course be the UK, which would see insolvencies grow by 14% in the two-year period 2019-2020.

Among the trading partners of Great Britain, the most exposed markets would be those most active from a commercial point of view with London.

It is no coincidence that, according to Atradius' calculations, the country most affected by an uncontrolled Brexit would beIreland, for which an increase in commercial insolvencies of 4% is estimated. For Dublin, the damage would be concentrated above all on the manufacturing sector, where 44% of the total added value comes from exports to the United Kingdom.

They follow on an equal footing with a +1,5% Holland, Belgium e Denmark. In this case, the most affected sectors would be textiles, chemicals, and the production of machinery for handling goods, "since characterized, in all three countries, by significant exports to the United Kingdom", reads the analysis .

The next position in the ranking is instead occupied by Germany, Spain e Portugal, where delinquencies would increase by 1%.

The increase drops to the same share as theItaly (+0,5%) for France and Austria, while it would be even lower for Finland, Greece, Sweden and for all the other countries of the European Union.

Business insolvencies infographic with no deal Brexit — [Read the Atradius Brexit Report]

In general, according to Atradius, a No hay trato Brexit would have negative impacts on sectors that have highly integrated supply chains between the UK and the rest of the European Union, such as the manufacturing, very responsive to an increase in trade barriers, theautomotive, food & beverage, chemicals and services.

“In a scenario of no agreement on Brexit – comments Massimo Mancini country manager of Atradius for Italy – we expect that the impact on insolvencies in Europe could be localized and sectoral. The positive dynamics of trade flows between Italy and the United Kingdom suggests to our companies to protect their business especially in those export driving sectors such as machinery, motor vehicles, agri-food and chemical, who are also those most exposed to the possible negative repercussions of an exit following a lack of agreement”.