I cannot imagine a no-deal Brexit scenario, says IMF’s Lagarde
CHRISTINE LAGARDE, managing director of the International Monetary Fund, has said that she “cannot imagine” a no-deal Brexit scenario.
The movement of people and aviation logistics were not covered by the World Trade Organisation (WTO) rules that would come into force should a deal not be agreed by March 29 2019, Ms Lagarde said, as she explained that such a scenario was unthinkable.
“[I] cannot imagine that would happen,” said the leader of the world’s lender of last resort, speaking at the IMF’s annual meeting in Washington DC. “For the people themselves, what does that mean? WTO does not provide for those,” the former French finance minister added.
As she highlighted the human factor in the Brexit decision making, Ms Lagarde said that the EU and the UK should prioritise the matter of people – those EU nationals living in the UK and vice versa – above all else. “[It’s a] situation of people first [and] business second,” she said.
Ms Lagarde’s comments come on the same day that Brexit talks between the UK and the EU appeared be deadlocked, raising the possibility that Britain could crash out of the union with no new trade deal in place.
Her remarks follow a speech earlier this week by Carolyn Fairbairn, head of the Confederation of British Industry (CBI), in which she accused Britain’s leaders of playing “human poker” with EU migrants.
A clearer timetable and plan for UK negotiations with Brussels was essential, Ms Lagarde argued, adding that “our [the IMF’s] hope is that it be conducted promptly”.
The IMF head also addressed the furore that emerged following the publication of the fund’s bi-annual “Fiscal Monitor”, which called for higher taxation on top earners in advanced economies in order to generate more inclusive growth.
It provoked significant backlash from leaders in the US who consider the IMF to be opposed to their plans to cut taxes for high earners and claimed that the fund wanted to see them fail.
Ms Lagarde also pointed to the importance for all economies of “increasing participation” of women in the workforce. She called on policymakers and central bankers to work hard to “close the gender gap between men and women” by addressing matters such as equal pay.