Düsseldorf and Cologne to suffer highest income losses in no-deal Brexit

North Rhine-Westphalia would be the German state hit hardest by income losses in the case of a no-deal Brexit, according to new research.

Düsseldorf and Cologne to suffer highest income losses in no-deal Brexit
A welder apprentice working on a piece of metal at the Butzweilerhof training centre in Cologne, one of the cities which will be hit hard by Brexit. Photo: DPA

Several studies so far have shown how Brexit will negatively affect Germany and Europe. A new one paints a similarly dismal outlook. Researchers at the Bertelsmann Foundation investigated how different regions across Europe would be affected when it comes to income losses after the UK leaves the EU.

In the absence of a withdrawal agreement between the UK and the EU, people living in EU countries (excluding the UK) would have to bear huge income losses of €40 billion euros per year, the study predicts.

SEE ALSO: 'Negative effects will occur': No-deal Brexit threatens German jobs

The authors of the report said that, unsurprisingly, the British themselves would be hit hardest in a no-deal scenario. UK citizens would suffer income losses of €57 billion per year (around €900 euros per capita).

In Germany, too, the loss of income would be high at around €10 billion per year, making it the hardest hit country in Europe after the UK. France and Italy would also see significant income losses amounting to billions of euros.

The losses are expected to be mainly driven by higher prices of goods and services as a result of tariffs that would kick in after Brexit. Currently, there are no tariffs in the EU single market.

Meanwhile, the US and China could actually benefit from Brexit. For the analysis, economists Giordano Mion of the University of Sussex and Dominic Ponattu economic expert with the Bertelsmann Foundation, analyzed data on global trade flows to predict the consequences of a Brexit.

“European value chains are negatively affected by Brexit,” said Ponattu. “This would make trade within Europe more expensive and trade with the rest of the world could become more attractive.”

SEE ALSO: Britons in Europe express anger over UK government's Brexit healthcare offer

The west and south of Germany hardest hit

In Germany, the areas in and around Düsseldorf and Cologne in the industrial region of North Rhine-Westphalia (NRW), would be affected the most in a no-deal scenario. In these areas the report authors expect income losses totaling €650 million (Dusseldorf) and €560 million euros (Cologne) per year – these figures correspond to around €126 euros per citizen per year.

NRW is Germany’s top industrial region and hosts 37 of Germany's top 100 corporations. It also has a significant small and medium business sector.

The government districts of Upper Bavaria (including the greater Munich area) would follow with an expected loss of €526 million euros per year (€115 euros per capita) in income. 

An Audio logo in Ingolstadt, Bavaria. Photo: DPA.

According to the authors, Upper Bavaria could cushion the Brexit losses better than NRW. That's because there are global players such as Audi in Ingolstadt and BMW in Munich, for whom trade with China and the USA is much more important.

Next comes Stuttgart, also a leader in car manufacturing, where €473 million is at stake, or €116 euros per citizen.

SEE ALSO: 'They voted against my way of living': Brits in Germany on life with Brexit

Brexit good news for the world – but not Europe

According to the simulations by the researchers, US incomes would benefit from a no-deal and could rise by around €13 billion annually.

In China, incomes could rise by around €5 billion annually, while in Russia a slight increase of around €260 million annually would be expected due to Brexit.

Withdrawal agreement makes a huge difference

Meanwhile, if there is a withdrawal agreement when the UK leaves the bloc, the outlook would be significantly better.

The authors said this could halve the loss of income for Germany to €5 billion compared to the no-deal scenario. In the UK, the losses would be around €32 billion. The whole of the EU, excluding the UK, would see annual income losses of around €22 billion if there is a deal in place, the report predicated.

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How roaming charges will hit travellers between the UK and EU in 2022

Trips between Europe and the UK and vice versa may well become more expensive for many travellers in 2022 as UK mobile operators bring back roaming charges. However there is some good news for all EU residents.

People look at their mobile phones.
How travellers between the EU and UK could be hit by roaming charges in 2022 (Photo by Daniel LEAL / AFP)

EU ‘roams like at home’ at least until 2032

First the good news. The European Union is set to decide to extend free roaming until 2032, so if you have your phone contract registered in an EU country you don’t have to worry about extra charges.

In addition to waiving the charges, the new regulation aims to ensure that travellers benefit of the same quality of service they have at home when travelling within the EU. If they have a 5G contract, for instance, they should also get 5G through the EU if possible. 

Under new rules, travellers should be given information about access to emergency services, including for people with disabilities.

Consumers should also be protected from prohibitive bills caused by inadvertent roaming on satellite networks when travelling on ferries or aeroplanes.

The final text of the new regulation was provisionally agreed in December. The European Parliament and Council will formally endorse it in the coming weeks.

UK companies reintroducing roaming charges this year

And now the bad news for travellers to the EU from the UK

Customers of UK mobile phone operators face higher fees when travelling in Europe this year, as some companies are bringing back roaming charges for calls, text messages and data downloaded during temporary stays in the EU.

This is one of the many consequences of the UK withdrawal from the European Union. Because of Brexit, the UK is no longer part of the EU’s “roam like at home” initiative which was designed to avoid shocking bills after holidays or business trips abroad.

The EU’s roaming regulation allows people travelling in the European Economic Area (EU countries plus Norway, Iceland and Liechtenstein) to make calls, send texts and browse the web using their regular plans at no extra cost. Switzerland is not part of the scheme, although some mobile phone providers offer roaming deals or special prices to cover travel in Switzerland.

Under EU rules, if the plan’s allowance is exceeded, the roaming fee is also capped at €0.032 per minute of voice call, €0.01 per SMS and €2.5 + VAT per gigabyte downloaded in 2022 (it was €3 + VAT in 2021). The wholesale price networks can charge each other is capped too.

The regulation was adopted for an initial period of five years and is due to expire on June 30th 2022. But the EU is preparing to extend it for another ten years. This time, however, the UK will not be covered. 

Which UK companies are reintroducing charges?

Three major UK network operators this year will reintroduce roaming charges for travels in the EU.

As of January 6th 2022, Vodafone UK will charge customers with monthly plans started after August 11th 2021 £2 per day to roam in the EU. The amount can be reduced to £1 per day by purchasing a pass for 8 or 15 days. Free roaming continues for earlier contracts, Data Xtra plans and for travels to Ireland.  

From March 3rd 2022, EE will also charge £2 per day to roam in 47 European locations, Ireland excluded. The new policy will apply to plans started from July 7th 2021. Alternatively, EE offers the Roam Abroad Pass, which allows roaming abroad for a month for £10. 

Another operator that announced a £2 daily fee to roam in the EEA, except for Ireland, is Three UK. The charge will apply from May 23rd 2022 for plans started or upgraded since October 1st 2021. The data allowance in monthly plans that can be used abroad is also capped at 12 gigabytes. 

O2 already introduced in August last year a 25-gigabyte cap (or less if the plan’s allowance is lower) to data that can be downloaded for free while travelling in Europe. Above that, customers are charged £3.50 per gigabyte. 

Other mobile operators said they have no intention to bring back roaming charges in the short term, but if won’t be surprising if they do so in the future. 

Sue Davies, Head of Consumer Protection Policy at UK consumer organisation Which? was disappointed at the changes and urged the UK and EU to “strike a deal on roaming charges” to stop companies “chipping away at the roaming benefits customers have become used to” and “prevent the return of the excessive charges people used to encounter.” 

By law, charges for mobile data used abroad remain capped at £45 per month and consumers can only continue data roaming only if they actively chose to keep spending. 

What about EU residents travelling to the UK?

In the EU, most mobile phone operators seem keen to continue free roaming for travels to the UK, but some have announced changes too.

In Sweden, Telenor aligned UK’s prices to those of non-EEA countries on May 1st 2021 while still allowing free roaming for some plans. 

Another Swedish operator, Telia, ended free roaming with the UK and Gibraltar on September 13th 2021 giving customers the option to access 200 megabytes of data for SEK 99 per day. People travelling to the UK can also buy a weekly pass allowing to make calls, send texts and download 1 GB of data. 

In Germany Telefónica Deutschland and 1 & 1 have extended current conditions for the UK until at least the end of 2022. However companies may keep other options open depending on negotiations with roaming partners. 

A1 Telekom Austria brought roaming charges back for the UK last June. Customers now have to pay €2.49 per minute for outgoing calls and €1.49 per minute for incoming calls if they are in the UK or Gibraltar. An SMS costs 99 cents and each 100 KB of data €1.49. 

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.