Up to their old tricks! IMF blasted over Brexit claim
THE head of the International Monetary Fund faced a furious backlash last night after claiming Brexit will spark a mass relocation of City firms to the EU.
Christine Lagarde, a key figure in the “Project Fear” propaganda blitz in the run-up to the 2016 referendum, suggested the country’s departure from the bloc next March would mean an “influx” for the eurozone.
She urged Europe’s financial regulators to step up preparations for the movement of business from London to the continent and to Ireland after Britain’s break with Brussels.
But her remarks provoked criticism from Brexit supporters, who pointed out that a series of doomladed forecasts from the IMF about the effects of the vote to leave the EU on the economy had been proved wrong.
And they appeared to fly in the face of signals from Deutsche Bank and other leading financial institutions that Brexit will not lead to an exodus from the City.
Ms Lagarde made her latest incendiary intervention into the Brexit debate at a conference organised by the European Central Bank in Dublin.
The IMF managing director said: “The euro area needs truly integrated financial and capital markets that allow companies to raise financing across borders more easily and to support investment.
“In the near-term, it is critical to ensure that regulatory and supervisory capacities are prepared for the influx of financial firms that will move to continental Europe – and Ireland – as a result of Brexit.”
Tory MEP David Campbell Bannerman, a leading Brexit supporter, said: “Christine Lagarde was helped into renewing her IMF role the second time around by George Osborne, architect of Project Fear.
“The IMF were disgraceful during the referendum and are up to their old tricks again.
“The EU is only a bit player in financial services.
“They simply don’t have the depth of expertise or range of services or history of financial services to rival London, which is number one in the world and will remain so after Brexit.”
Senior Tory MP Jacob ReesMogg said: “The competition for the City is from international finance centres such as New York, Singapore and Hong Kong. It is not from second-tier EU cities.
“Mrs Lagarde shows the narrow arrogance of the European bureaucrat who thinks the world revolves around the EU’s out-dated protectionist model.” During the EU referendum campaign two years ago, the IMF was accused of trying to “bully” voters by warning that a vote to leave the EU would lead to a collapse in house prices.
At the time, Ms Lagarde claimed there was a high probability of a “technical recession” if the UK voted to break ties with Brussels.
She also claimed a majority Brexit vote would lead to economic scenarios ranging from “pretty bad to very, very bad”.
Months after the vote, when an economic downturn failed to materialise, the IMF drastically revised its forecasts for the UK economy.
Yet Ms Lagarde insisted: “While we have upgraded our forecasts for 2017, we have downgraded for 2018. We are still of the view that it will not be positive all along and without pain.”