Brian Klaas, fellow in comparative politics at the London School of Economics, says Yes.
As annoying as it is, politicians don’t think like investors. Everybody knows that punishing Britain would be bad for business in Europe and the UK. But Europe’s politicians also know that giving Britain a sweetheart deal that involves all the benefits of membership without the corresponding obligations could splinter the rest of the EU. Eurosceptics would rightly point to a thriving Britain as further evidence of the need to devolve power away from Brussels. They may try to split away completely. After all, why bother with membership if you can get all the benefits of being a member but with fewer obligations? The EU’s political elite believes in a strong, unified Europe. They have staked their careers on it. Brexit threatens their dream and their legacy. Many of them will gladly consider a modest economic punishment – even if it punishes their own economies in the short term – as a reasonable price to pay for the long-term survival of the European project.
Ruth Lea, economic adviser to the Arbuthnot Banking Group, says No.
Doubtless there are some in the EU’s upper echelons who would wish to punish the UK, not least of all to discourage other potential “exiters” from the EU. But I have little doubt wiser heads will prevail. German Chancellor Merkel, indisputably the EU’s most influential politician as head of Europe’s hegemon, has already said that there was no need to be “nasty” to the UK in the upcoming negotiations. And, fascinatingly, she added that deterring other countries from leaving the EU should not be a priority in the talks. Note also that Markus Kerber, head of the highly influential BDI (Federation of German Industries), has commented that it would be “very, very foolish” to impose barriers on Anglo-EU trade. Pragmatic, commercial reality is almost certain to drive the negotiations, not retribution. And the commercial reality is that the UK had a visible trade deficit of £88.7bn with the EU in 2015, £31.5bn with Germany alone. We are simply too important and lucrative a market.