Brexit and the Polish economy – consequences

Each scenario of Great Britain leaving the European Union has significant consequences for both the economy and ordinary citizens. For now, London needs to negotiate new terms of cooperation with the European Community. The problems will start on January 1, 2021.

We already know that an orderly Brexit will probably come to an end and the Exit Agreement negotiated by the EU and the United Kingdom will enter into force on January 31, 2020. This means that the Interim Agreement will be in force with the United Kingdom until the end of this year. Although it allows the extension of the transitional period, Prime Minister Boris Johnson officially stated that the British government rejects such a possibility.

In practice, the conditions for doing business for enterprises will not change in practice. During its term, Great Britain will continue to participate in the internal market and customs union, and the rules of trade between Poland and Great Britain will not change. In contrast, the terms of economic cooperation after January 1, 2021 will depend on the content of the future Free Trade Agreement between Great Britain and the EU. Her negotiations will start in February 2020. Then the terms and conditions of future cooperation will be defined, which will allow to precisely assess the impact of Brexit on the Polish economy.

Both the European Union and the United Kingdom emphasize the need to negotiate an agreement to the maximum extent maintaining the current principles of economic cooperation.

Great Britain is a significant economic partner of Poland, the third recipient of Polish products, a country where we have been recording a surplus in goods and services for years. Currently, Polish exports to the United Kingdom are worth EUR 14 billion. That is why Poland is strongly in favor of developing an ambitious and comprehensive trade agreement between the European Union and the United Kingdom.

When it comes to possible migrations of international corporations from the Islands, it is Poland – next to Germany, France or the Netherlands – that is indicated in various analyzes as a potential investment location, which could naturally benefit the Polish economy.

There are already the first unofficial signals in this case, e.g. regarding the expansion of production capacity by Toyota in Lower Silesia (originally planned in the United Kingdom). At the same time, Poland is expanding the financial services and business services sector, as evidenced by the placement of some offices of companies such as Goldman Sachs.

Polish business should certainly prepare for changes in economic relations with the British Isles. But he doesn’t have to be afraid of shock. Both sides do not want this. This year will be a time of waiting and slow accommodation for the inevitable changes waiting after January 1, 2021.