Johnson’s hard brexit plans could be the trigger for a EU wide recession
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/DDN-20170410-1
The UK is 16% of EU GDP
Eu exports to the UK are about 4% of EU GDP, maybe. Brexit isn’t going to stop all of those exports (there really will be food riots if it does) so even with a hard brexit that creates a depression in the UK it’s unlikely to create an EU wide recession without some help from:
Normal economic cycles – the current post 2008 period of growth and prosperity is the longest I’ve lived through and won’t last forever, partly because:
Monetary easing and low interest rate monetary policy has its limits. When everyone solveable has borrowed as much money as they can (or want) the instrument is so blunt it wont cut butter. But it’s still no brake and neither are:
The other things that often trigger a recession: high energy prices mainly, take a look at the oil price despite Iran tensions. The US is self sufficient thanks to fracking.
So we’re left with a bit of strop over trade. I really don’t see modest price hikes on Chinese stuff or Trump putting a tax on fine wines bringing the EU to its knees.
That said I’m hoping there might be a few buying opportunities as I consider most asset classes overpriced at the moment, and that really could be a problem. It doesn’t take many people to think like me to knock 25% or more of stocks and that makes a lot of people feel poorer and less willing to spend and vicious circle.
So in conclusion it’s not so much Brexit as yet another financial dip/correction/crash that will cause a recession in Europe.
It’s just that a no deal Brexit will make Britain the hardest hit place this time around but it still hasn’t happened yet.