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Hard Brexit will hurt UK more than EU, says banker

By Elena Becatoros

Published 08/10/2016

Assessment: Yannis Stournaras
Assessment: Yannis Stournaras

The UK's exit from the European Union single market would not hurt the continent's eurozone economies as much as initially expected, and it would be Britain that suffers most, a leading European Central Bank official has said.

As Britain and the EU, including 19 countries in the eurozone, prepare to enter thorny discussions on how to set up new trade relations, Yannis Stournaras's comments suggested the eurozone would be in a stronger position to weather the uncertainty.

"Negotiations will not be easy," Mr Stournaras, who is also governor of the Bank of Greece, told the Associated Press. "But it seems that the effect on the euro economy will be much less than initially anticipated. I think the greatest cost will fall on the UK economy, I'm afraid."

Britain voted in June to exit the EU, and will become the first nation to leave the 28-member bloc. Prime Minister Theresa May has suggested the country could be heading for a definitive break from the EU's single market, in a move that has become known as "hard Brexit". The comments put renewed pressure on the pound and rattled markets.

While economic indicators of the UK and eurozone have held up since the vote, experts warn the impact could be felt over the longer term.

Once the UK starts negotiations, expected by April, it will take years to find trade relations. Leaving the single market will throw up tariffs on trade between the UK and EU, but Britain depends more on the EU for its exports than the other way round.

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