ROME (Reuters) – Exports of Italian goods to Britain could slump by up to 7 percent next year if Britons vote to leave the European Union in a referendum on Thursday, Italian export agency SACE said on Monday.
If Britain votes to leave, its government would have to notify EU partners of an intention to do so before kicking off two years of negotiations on the terms of an eventual divorce.
But SACE said Italian firms would start to feel the effects of such a vote by next year, when exports would fall by 3-7 percent, equivalent to between 600 million and 1.7 billion euros (1.30 billion pound). Britain is Italy’s fourth biggest export market. Italian exports to Britain have risen for the past two years to be worth 22.5 billion euros in 2015, SACE said, adding that exports should rise this year even in the event of a “Brexit” vote. Machinery including pumps, lifting equipment and taps make up almost 17 percent of Italy’s annual exports to Britain and would be hit hardest by a vote to leave. Exports of vehicles would also take a big hit, according to SACE, which said it based its calculations on a forecast that a vote for Brexit would shave almost two percentage points off projected real growth in Britain’s national output next year. Clothes and fabrics would take a smaller hit, while exports of Italian food and drink would continue to rise, but at a slightly slower rate, it said. If Britain votes to stay, Italy expects to sell ever more to customers there and for the value of exports to reach 28.4 billion euros by 2019, SACE said. ‘Leave’ campaigners say trade is in the interests of both Britain and the EU and so will not suffer in the event of Brexit. ‘Remain’ supporters, including Prime Minister David Cameron and the Bank of England, warn of major economic disruption if Britain votes to leave.
(Reporting by Isla Binnie; Editing by Gareth Jones)