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A new analysis by Swedbank of the effects of a Brexit on the Baltic States found that there would be little impact on trade but that the biggest impact would be a more divided Europe with implications for Lithuanian emigrants, especially to Britain.

“The political consequences for the EU would probably be the largest negative effect – an even greater challenge for EU collaboration and a more politically divided Europe, greater likelihood of more radical/populist political forces gaining power, a further delay of necessary structural reforms, larger geopolitical instability. The impact could be extensive also for the Baltics,” said the Swedbank report.

“The UK has also been one of the major destinations for Baltic emigrants following the 2008-2009 crisis. The social security network in the UK is already being reduced and will continue to do so. In case of Brexit these processes could amplify, and, with a weaker UK economy, emigrants should expect even less social support and fewer job opportunities. For those considering moving to the UK, it will no longer be as easy.”

Swedbank said that in the case of a Brexit, of which it only saw a 40% chance the consequences for the Baltics and the euro area as a whole would be felt through three main channels: financial markets, foreign trade and political.

However, it is said consequent volatility on European markets would have little effect on Baltic States because of their low debt levels while a limited trade exposure to the British market, 3%-5% of total goods exports would limit the impact on export performance although Swedbank said some industries like wood, machinery and equipment would be hit harder.

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