Nobel Laureate Says Brexit’s ‘Massive’ Fallout Gets Short Shriftby
Pissarides says impact will be ‘worse than most people think’
Weekend poll shows 45% of Britons now back staying in EU
The outcome of the U.K. referendum on European Union membership may come down to the failure of the “Remain” campaign to explain what’s at stake for the country and the world, according to Nobel economics laureate Christopher Pissarides.
“The impact from a Brexit will be worse than most people think and it’s partly the failure of the campaign to remain to point it out,” Pissarides said in an interview on Saturday in St. Petersburg, Russia. “When you have a process that started 60 years ago and then suddenly you reverse -- it will not be a temporary glitch, it is going to be a massive bump.”
The possible implications of the U.K.’s exit will range from London’s loss of its standing as the financial heart of Europe to the challenge for companies of rebuilding their operations and creating a new business model, according to Pissarides. The 68-year-old professor at the London School of Economics on Sunday joined nine other Nobel-prize winning economists in a letter to the Guardian newspaper, saying Britain is better off inside the EU.
The warnings chime in with concerns expressed by the likes of Deutsche Bank AG Chairman Paul Achleitner, who said this month that Brexit would be an “economic disaster for the U.K. and a political disaster for the EU.”
As British voters prepare to have their say on June 23, the referendum is being watched by governments and investors all around the world amid concern that a so-called Brexit would spark turmoil across global markets. Pissarides said the bloc will push for Frankfurt to replace London as the EU’s financial center if the U.K. leaves.
“For Europe it will be bad, because it will be the first time that there’s a reversal in the process of European integration,” he said. “The rest of the world will suffer because the financial center will be the first one to be hit. London as a financial center will not maintain its position.”
Both sides returned to the fray Sunday after suspending the campaign for 60 hours following the murder of Labour lawmaker Jo Cox. The pound strengthened by the most in three months against the dollar and sterling volatility retreated following polls showing “Remain” regaining the lead that it had lost in recent weeks.
Staying in the bloc won 45 percent support in the Survation telephone poll of 1,001 adults on Friday and Saturday for the Mail on Sunday. Leaving was endorsed by 42 percent.
“There’s a public perception that it is not going to make much difference,” Pissarides said. “If Britain decided to exit, then it’s going to have implications for a very long time.”