Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Fear, Loathing and Brexit Britain Should Remain in the Eu, but It's a Close Call

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Fear, Loathing and Brexit Britain Should Remain in the Eu, but It's a Close Call

Article excerpt

Four and a half months before the U.S. presidential election, there's a vote next week that could matter as much for the world's future: Britain's referendum on whether to stay in the European Union.

This vote is a choice between bad and worse.

I would vote Remain, even though the EU is deeply dysfunctional and shows few signs of reforming. But British exit - Brexit - would probably make things worse for both Britain and Europe.

Brexit would make Britain poorer. It would hurt British trade with the rest of Europe, reducing productivity and incomes. My rough calculations suggest that Britain would end up about 2 percent poorer than it would otherwise be, essentially forever.

Brexit also would undermine Britain's counterpart of Wall Street - which is a big source of exports and income. So the costs could be substantially bigger.

What about warnings that a Leave vote would provoke a financial crisis? That's a fear too far. Britain isn't Greece: It has its own currency and is not at risk of monetary chaos.Still, as an economic matter Brexit looks like a bad idea.

Some Brexit advocates claim that leaving the EU would free Britain to do wonderful things - to deregulate and unleash the magic of markets, leading to explosive growth. Sorry, but that's the same free-market fantasy that has everywhere proved delusional.

No, the economic case is as solid as such cases get. Why, then, my downbeat tone about Remain?

The impacts of Brexit would be uneven: London and southeast England would be hit hard, but Brexit probably means a weaker pound, which might help some of the old manufacturing regions of the north.More important, however, is the sad reality of the EU that Britain might leave.

The European project began more than 60 years ago, and for many years it was a tremendous force for good. It promoted trade and helped economic growth, but it also was a bulwark of peace and democracy in a continent with a terrible history.

But today's EU is the land of the euro, a major mistake compounded by Germany's insistence on turning the crisis the single currency wrought into a morality play of sins that must be paid for with crippling budget cuts. …

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