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The economy will suffer Demetriades on Brexit

Given that a poll published in May showed than 88% of economists feared a long term fall in GDP if the UK left the single market, it's difficult to find anyone in the field of economics who believes that Britain leaving the EU will have an economic benefit. One University of Leicester academic has gone as far as saying that should the UK sever itself from the European Union, it will also lead to less trade, more uncertainty and implications for Britain's international influence.

That academic is Professor Panicos Demetriades. At the University of Leicester, few people, if any, are more qualified to comment on the matter. Currently a Professor of Financial Economics, Demetriades was previously a European Central Bank Governing Council member, as well as the Governor of the Central Bank of Cyprus.

"From an economics point of view, the general British public will certainly be better off in Europe," said the professor in a recent interview with the News Centre. "A country that stands alone in a globalised world is not necessarily a country that has more sovereignty or more freedom...its ability to shape its own future, it's not really in its own hands - it's in the hands of the globalised world."

Click here to hear what he had to say to Nathan Ifill ahead of the referendum:

International implications

"The leaders of Europe clearly would not take kindly to this Brexit. I just can't see how Britain would have an easy negotiation." Should Britain and the EU divorce, Demetriades believes that the latter would punish us for doing so. "They will want to make an example, I think, of Britain that no one wishes to follow." Recapping his earlier points, the professor makes his stance on the matter very clear: "I just simply cannot see any economic benefits accruing from a Brexit vote and I can only see enormous economic costs.

"It will be indeed very likely that we will have another referendum for Scotland to exit from the United Kingdom and join Europe," Demetriades said, arguing that similar referendums could also take place in Wales and Northern Ireland. "There is a risk that five years down the line, there will be just England standing on its own. How is that going to help the British influence on the world?"

While Professor Demetriades might be resolutely pro-EU, he also admits that the current relationship has failed. He believes that the reason that we're having a referendum now is because people think Britain's influence on Europe has been very limited, something which he agrees with. However, rather than blame Europe, Demetriades insists that this is a failure of domestic politics - a failure of the government to involve themselves in the European Union at the highest level: "[The Conservative government] has not engaged properly in Europe. By belonging to a Eurosceptic group in Europe in the European Parliament, they have marginalised themselves and it is for that reason now that we have the view that we don't have an influence in Europe."

Less trade, more uncertainty

"There's no way in which I can envisage a scenario in which there will be more trade outside the European Union. What there will be for sure is a lot more uncertainty." Demetriades claims that the minute UK citizens vote for a British exit, that uncertainty will impact on the economy, on jobs and on the prospects of the country, as well as put off foreign investors from investing.

Britain will also have to negotiate where it stands with the rest of the world, and as US President Barack Obama said in his April 2016 visit, Britain is not going to come to the top of the queue when it comes to talks on trade. Like many others, Professor Demetriades admits that it's anyone's guess as to what will happen following a Brexit vote, and he also doesn't know what kind of trade deals that we would come up with either. However, when it comes to trade, he believes that if Britain wants to trade with the United States, they'd get a better deal staying in the EU: "I think it's political naivety that drives this idea that Britain on its own is better off in the world," he argues. "I can't imagine that a country standing on its own will be able to get a better deal than 28 countries standing together."

The countdown continues

As June 23rd approaches, many other University of Leicester academics have been giving their opinions on the EU Referendum. These are not necessarily the views of the University of Leicester - each piece expresses the independent views and opinions of the academics behind them. If you don't agree with what they have to say, are a doctoral student or academic at the University of Leicester, feel free to write a counter opinion for Think: Leicester. Once it's written, please send it to Alex Phillimore at ap507@le.ac.uk.

Where do you think the British economy will be stronger? In or out?

In new programme "Expert Comment: Brexit", eight University of Leicester academics from the Department of Economics, Department of Politics and International Relations, School of Management, and the Leicester Law School - including Professor Demetriades - have been weighing in on the debate, as well as the President and Vice-Chancellor himself.

Among others, some of the themes explored include how trade, influence, employment, workers' rights, terrorism and crime could all be affected by the referendum result.

You can listen to the programme for yourself here:

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