The comparison analysis of the Brexit financial consequences for the Central and Eastern European countries of the EU

Abstract

Brexit will cause tremendous changes in both economy and political situation of Europe. The consequences of this decision will be felt by the entire European economy, not only by the countries with the strongest economic ties with the UK; what is more, those consequences will have long-term effects. This decision will weaken economic perspectives in Europe and might threaten its current economic and political order. However, it seems that weaker EU economies, including the CEE countries will be the ones that will suffer the negative effects of Brexit the most. They are stronger dependent on both financial support from the EU budget and credibility that the EU membership gives them. The conducted comparative analysis indicates that 10 out of 12 biggest net beneficiaries of the EU budget in the years 2004-2016 are the CEE countries, which suggests that they will feel the limits of the EU budget the greatest. This will, without a doubt, limit their development abilities and will also decelerate the catch-up process, Especially that the conducted analysis of the Pearson’s correlation coefficient between the percentage change in the level of GDP per capita in PPS (current prices) in the years 2004-2016 and the level of the net balance with the EU budget in the years 2004-2016 (in relation to GDP in 2016) indicates positive and quite strong dependence, i.e. the higher net balance with the EU budget the higher increase in the GDP per capita in PPS (rEU27=0.69), which seems to confirm the positive influence of the EU membership over the CEE countries’ social-economic development.