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Britain’s EU membership ‘mutually beneficial’

PHOTO:AFP

PHOTO:AFP

Britain’s membership in the EU is beneficial to both parties, the ECB’s chief said Thursday, while making it clear that any decision by the UK to quit the bloc would have only a “limited” impact on the eurozone’s recovery.

Mario Draghi also warned that volatility was expected to dog the markets in the run up to, and possibly beyond, the June 23 knife-edge vote, as he became the latest economic heavyweight to underline the advantages a Britain that held fast to the EU.

The ECB chief’s comments came as US President Barack Obama is expected to also make a strong case for the “Remain” camp in London on Thursday.

With opinion polls showing the “Leave” and “Remain” camps evenly split at around 50 percent each, the world’s G20 top economies last week warned that one of the risks to the global economy was “the shock of a potential UK exit from the European Union”.

In Frankfurt, Draghi stressed that both Britain and the EU stood to gain from the UK’s continued membership.

“Let me say unequivocally that we view the participation of the UK to the European Union as as mutually beneficial and we will continue to say so in the coming weeks,” Draghi told a news conference.

Talk about a possible Brexit “has already produced some significant consequences on the markets”, in particularly hurting the value of the pound sterling.

“We do expect continuation of market volatility certainly until the referendum… probably even after the referendum,” he said, while stressing that he did not want to speculate about the result of the vote.

“Is it enough to endanger the economic recovery in euro area? The assessment of our staff is that the risk of this happening is limited,” Draghi added.

The ECB’s assessment of a mild impact on the eurozone contrasts with the UK Treasury’s report on the economic cost to Britain.

Brexit could shave six percentage points off Britain’s growth by 2030 and the annual loss of gross domestic product to each household could be as high as 4,300 pounds (5,400 euros), it said.

Finance Minister George Osborne warned that the country would be “permanently poorer if we leave the European Union” and it was “complete fantasy” to expect that Britain could then negotiate an advantageous trade deal with the EU.

Around a fifth of voters remain undecided after the campaign officially got started last week.



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