Barclays: Britain could benefit by leaving the EU
QUITTING the EU could be good for Britain’s economy, according to a leading bank.
Barclays said the worst effect of Brexit would be felt by Europe, rather than the UK which could benefit.
Its verdict came as EU chiefs are today set to offer David Cameron an emergency brake on benefits for migrants during talks in Brussels.
The report by Barclays experts added that Britain could become a safe haven from a disintegrating Europe, giving investors shelter from problems with the euro.
‘If politics in the EU turned for the worse, the UK may be seen as a safe haven from those risks,’ it said. But the bank also warned that if the referendum favours exit, it could lead to the collapse of the EU itself.
Analyst Philippe Gudin said: ‘The referendum is generally seen as a UK issue when it is better seen as a European issue.’
He warned that the political and institutional aftershocks of a ‘leave’ vote were far greater than the economic fears.
Mr Gudin added that if Britain voted to quit, it would encourage other EU member states to think about leaving amid the migration crisis.
But Barclays also said a vote to go would open a ‘Pandora’s Box’.
It warned that the financial markets have failed to grasp the sheer ‘breadth’ of the poll, calling it one of ‘the most significant global risks of the year’. The bank’s verdict, reported in the Daily Telegraph, follows a warning by Deutsche Bank’s chief economist on Brexit.
David Folkerts-Landau said: ‘The implications will be truly devastating for Europe. Continental Europe will be relegated to second-rank status.
‘It would lose London and the
‘Could be seen as
a safe haven’
Anglo-Saxon connection. The checks and balances imparted by the UK will be gone.’
Mr Cameron is set to hear the proposal for an emergency benefits brake from European Commission chief Jean- Claude Juncker. Brussels sources said Mr Juncker has refined the idea so handouts for new EU migrants could be halted if they are placing undue strain on the UK.
Under the change, the restriction could last for up to four years, the timespan demanded by Mr Cameron.
But, critically, any move to apply the brake would come from Mr Juncker and his fellow EU bureaucrats.
Last night the Prime Minister welcomed the intervention although previously he has described the idea as ‘some arcane mechanism’.
Critics have dismissed the plan. Steve Baker, co- chairman of Conservatives for Britain, said it was ‘akin to asking for permission to shut the stable door after the horse has bolted’. Arron Banks, co-founder of the Leave. EU campaign, said: ‘People don’t want an emergency brake, they want control of the steering wheel so we can avoid the car crash up ahead.’
Yesterday Downing Street revealed that Mr Cameron will hold talks there on Sunday with European Council president Donald Tusk.
Mr Tusk is expected to publish a ‘concrete proposal’ for a new deal with Britain within days ahead of a crunch EU summit next month.
The Prime Minister will then go to Hamburg to speak at a banquet hosted by German Chancellor Angela Merkel. But some ministers believe hopes of securing a deal next month are fading as EU leaders are too distracted by the migrant crisis.