Daily Management Review

UK Would Be Economically Impacted More Than EU By Brexit: Former ECB Head


09/20/2018




UK Would Be Economically Impacted More Than EU By Brexit: Former ECB Head
According to the former head of the European Central Bank, there would be a larger economic impact because of Brexit on the UK than on the European Union.
 
In an interview to the BBC, Jean-Claude Trichet said that the exit of UK from EU was "totally contrary to the new world" of large emerging economies which have single markets and currencies as well.
 
"It's very much a question of proportion", he said when asked about the economic impact of Brexit on other EU countries.
 
Compared to the £2tn value of the UK economy, the worth of the EU economy is about £13tn.
 
"If I take the EU as a whole and compare the GDP of the EU to the GDP of the UK, you see there's a small portion which is the UK", he said.
 
According to official figures, almost half of the exports from the UK in 2016 went to the other EU countries which makes the EU the largest trade partner of the UK.
 
According to supporters of Brexit, the UK can gain by making new, lucrative trade deals fast with the speedily growing emerging economies.
 
The EU will also suffer because of Brexit in a time when other parts of the world are experiencing economic growth, Trichet suggested. He argued that it should be avoided "for the sake of the UK in the very long run, and for the sake of our continent".
 
"In a period when India, China, Brazil, Mexico, Indonesia, and all emerging economies are going very fast and are dwarfing Europe more and more, how can it be that we decide to separate ourselves, to split? It is totally contrary to the new world” he said.
 
"How many single markets with a single currency will we have which will be enormous in 10 or 20 years' time? Look at India, look at China, look at all those emerging countries. I am a little bit passionate because I think that there's something which goes against what would be a good strategy for all Europeans."
 
Trichet was the head of the European Central Bank from 2003 to 2011 and managed the bank at the height of the global economic crisis of 2007-08 and through the Greek debt crisis. His current concern is about the increasing levels of public and private debt throughout the globe.
 
He said that the extent of financial leverage in the current time is being taken forward at a speed that is not sustainable. He suggested that the international; community needs to be doubly aware about the dangers of this global financial leverage because this could be amongst the primary causes for the next financial crisis.
 
"If we had a new crisis nobody would forgive the international community for not having taken the appropriate steps to avoid it", he said.
 
(Source:www.bbc.com)






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