Project Fear relies on economic scaremongering, but the IMF, French and German economists are relaxed about the prospect of the UK leaving the EU.
The IMF, perhaps aware that the UK is on the verge of a vote to leave the EU – Monday night’s You Gov poll put leave back in the lead with a three point swing – and mindful of their reputation, have come out with a forecast about the UK’s prospects post-Brexit that is remarkably sanguine and, far from saying there will be chaos, have stated that there will probably not be even a recession after Britain votes to leave the EU.
Britain need not suffer a recession if it leaves the European Union, the International Monetary Fund has said in its assessment of the risks around the referendum.
Even if the UK only negotiates as poor a deal as Norway, the IMF does not think the UK will go into recession. The UK is in a far better position than Norway, as it has a trade deficit with the EU, who are unlikely to want tariff wars.
Only in the event that the UK negotiates no deal of any type whatever is the IMF predicting a recession and even in that case, a very mild one of 0.8 % of GDP sometime in 2017.
To this miserably (from George Osborne’s point of view) upbeat forecast, the Vote Leave campaigners can now add two more sets of voices to Project Hope: senior French economists wrote to the Times to voice their support for a Brexit to benefit both the UK and the remaining countries in the EU. A Leave vote would usher in a leaner EU that was more prosperous, stable and democratic, they said.
Here is the text of the letter:
Sir,
Brexit would allow the UK to choose its own social and fiscal rules, and to control access to the UK labour market by migrants. As the UK is neither part of Schengen nor the Euro, and is doing better than most of the other countries on the continent, why would leaving the EU suddenly pose a problem? Brexit would be the trigger for a total renegotiation of the EU treaties by all European peoples, and would allow the EU to be transformed into a common market with supple confederal structures which would be more effective, freer and more prosperous. This new Europe would cost much less for the UK, which would save the £7 bn per year net it presently spends on EU membership. The City would preserve its international financial supremacy; there is no reason to have any confidence in declarations about the negative effects of Brexit, which would be good for Britain and good for Europe.
Pierre Gérard, former member of the Bank of France Monetary Policy Council
Henri Temple, professor emeritus of economic law, University of Montpelier
Guy Berger, emeritus professor, L’Écoles des Hautes Études en Sciences Sociales
+ and a further eight economists
The German press are no less relaxed. Die Welt said in an editorial:
Brexit is not the iceberg – it is the warning bell. On the mainland, many look at our neighbours with a mixture of horror and admiration. Will these really be the first passengers to leave the sinking ship?
British departure can be an opportunity for the EU. Only with a shock ‘out’ can this institution, which enjoys less and less confidence from its citizens, find momentum and confidence…..
Fresh figures from an American pollster reveal that the ailing single currency, the Euro, is clearly rejected by the citizens of most member countries. … even senior EU officials speak behind closed doors of the purifying force of the EU Referendum…
The paper discusses the lack of sovereignty of member states to the backroom boys of the Commission and goes on:
The existential crisis of the European Union can be measured by two gigantic innovations that need to be considered a failure of the current set-up: the Schengen area and the Euro.
The article goes on to discuss in depth the EU’s beggaring of the South, the strain of Greece on German finances and the need to end free movement now that poor nations have joined rich ones.
Der Welt is quite clear that the European Parliament is indeed about to approve an EU army and override national vetoes:
The European People’s Party has just discussed ambitious plans to reactivate the EU at a meeting in Nice. This begins with binding majority decisions against the veto of individual countries – and continues with Europe’s own army and national border protection. But how can the damaged EU just now find the strength for such radical steps?
How indeed?
It would seem that there is an international chorus of economists, friends and allies rooting for the UK to leave the EU and offer an impetus for real reform in Brussels. So much for Project Fear.