The International Monetary Fund said a British vote to leave the European Union could have significant and negative effects on the UK economy, the latest contribution by an international institution to the fierce debate over Britain’s future in Europe.
If the IMF thinks it’s a bad idea, it’s probably a pretty good idea.
More seriously, the IMF is making its assessment on this basis:
…a vote in the June 23 referendum to leave the EU could “precipitate a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output.”
The uncertainty and ensuing volatility and output hit are non sequiturs. Of course there’ll be turmoil during the transition. There’s turmoil in any major transition. That’s not a reason to do or not to do anything. The reason, the valid reason to do or not come solely from the new régime post-transition, when things have stabilized again. For the IMF to obfuscate like this is for the IMF to show itself unserious.
Long-term costs could be substantial? This is purely speculative, at least as much so as the other side’s claims that long-term gains could be substantial. And, frankly, the gains are more likely than the costs. For one thing, the decisions leading to gains or costs will be solely those of the Brits, and not anything imposed on them by an extranational body that is not focused exclusively on what’s good for Great Britain. For another thing, the Brits will lose the costs of a bureaucracy that depends badly on not just consensus within a single Parliament, but on consensus across nations that don’t share the same values regarding social, political, or monetary philosophy.
And Great Britain will be able to go back to a free market economy of its own devising, and not be straitjacketed by the social democratic economies of the continent.