While I do not have a blog post for today, I would like to point you at an informative study on BREXIT carried out by the OECD together with a speech of OECD Secretary-General Angel Gurría on the OECD’s key findings.
The key conclusions of Angel Gurría (2016) are:
- the United Kingdom’s current EU membership is mutually beneficial
- there is no upside for the UK in BREXIT
- there are only costs involved in leaving the EU, both in the short-run due to increased uncertainty and in the long-run from a weakening in the UK’s international position
- the future advantages for the UK stem from remaining in the EU
The OECD coins this bundle of negative economic outcomes, which the UK would buy itself into , the BREXIT Tax. It would weigh on the UK’s economy essentially for an unlimited time period, which is the worst case scenario for the still fragile economy after its sluggish recovery from the GFC. The UK would essentially kick itself out of the world race for the highest standards of living, making itself only worse off. What is more, Gurría points out that there are already real costs today. Firstly, the Pound has depreciated against the Euro and also business confidence has taken a hit in the weeks or even months leading up to the referendum. Secondly, the uncertainty regarding the outcome of the vote has also stifled economic growth.
It is more than worth reading or – alternatively – listening to!
Gurría, A. (2016, 27 April). To Brexit or not to Brexit: A Taxing Decision [transcript]. OECD. Retrieved from: http://www.oecd.org/economy/to-brexit-or-not-to-brexit-a-taxing-decision.htm
OECD (2016). OECD study finds Britons will be paying a heavy “Brexit tax” for many years if UK leaves EU. Retrieved from: http://www.oecd.org/economy/oecd-study-finds-britons-will-be-paying-a-heavy-brexit-tax-for-many-years-if-uk-leaves-eu.htm