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WASHINGTON, July 19. /TASS/. The international monetary Fund (IMF) believes that the result of a Brexit no one in the Eurozone will not win. This is stated in a statement Thursday the report is devoted to estimating the economic consequences of a British exit from the European Union.
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“The scale of integration of the UK and Euro-zone countries suggests that as a result of Brexit will be no winners”, – consider in Fund.
As the authors of the report, the Kingdom’s exit from the community “will inevitably lead to losses for both sides.” “We found that the level of performance of EU countries will decrease by 0.06 – 1.5 percentage points in the long run. The range of estimates depends on whether we accept a “soft” or “hard” Brexit . This is probably the loss that should be interpreted with caution, given the uncertainty characterizing the empirical assessment,” the report said.
The IMF stressed that the UK “is among the three leading trade partners of the Euro area” and draws attention to the significant amount of “cross-border capital flows” between the Kingdom and the community. The authors also point to “significant migration flows” between the government and some Eurozone countries. “Higher barriers to trade, capital movements and migration of people after Brexit can break these ties that will lead to the reduction of trade, investment and labour mobility”, the IMF notes. The specialists underline that “the economic costs on both sides will be significant.”
However, said the IMF, the EU’s share “in total costs will be disproportionately smaller because of its larger size.”
Brexit will be held on March 29, 2019, after which, according to the plan, there must be a transitional period lasting until 31 December 2020.
The growth rate of the economy of the Euro zone slow down
High growth rates of the economies of the Euro zone slowing to a more moderate and 2.2% in 2018 and 1.9% in 2019. This is also mentioned in the IMF report.
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“The economic growth of the Eurozone countries is still energetic, but begins to slow to a more moderate pace. The main driving force behind [these economies remains domestic demand, backed by a serious process of creating jobs,” – noted in the Fund. The report’s authors emphasize that in 2023, the pace of development of the economy of the Euro area will fall to 1.4%.
“In the medium term, changing demographics, weak productivity growth and the consequences of the [financial] crisis will continue to resist [the economic growth] – according to experts of the IMF. – While overall inflation has recently shown some volatility, underlying inflation remains weak.” According to their forecasts, inflation only a few years closer to the target of 2% set by the European Central Bank.
Expected to experts of Fund, the economy of the Eurozone countries in the future expects “a lot of global and domestic risks.” “Trade disputes intensified with the recent introduction of US customs duties on imports of steel and aluminum products,” – noted in the organization. The report called important domestic risk “policy of inaction” on the part of the authorities of the countries of the region, as well as “the political turmoil at the national level”. “The lack of progress in negotiations on increases the risk of Brexit [British EU] with devastating consequences,” – noted in the work.
The IMF believes that “the time has come to increase the stability of the [economies] of the Euro area, “to support monetary policy” and policy “the reduction and distribution of risk.”