Brexit: EU 'can no longer fund bailout schemes' says expert
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The loss of the UK’s financial power has sparked an economic crisis inside the EU, according to one leading European political expert. Robert Oulds, who is the director of the Bruges Group, said that Brexit had blown a huge hole through EU finances and Brussels may not survive another economic crisis. Britain’s departure has already left a £65billion (€75bn) hole in the EU budget.
Speaking on Narcissi LTD, George Galloway asked the Bruges Group chief whether the EU will have greater or lesser impact on the world stage after Brexit.
Mr Oulds responded: “I don’t think the EU will have any greater impact after Brexit.
“With Britain’s departure, it’s lost a great source of revenue.
“It’s not only lost Britain’s contributions – Britain was the second-highest contributor to the EU after Germany into their funds.”
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He continued: “But it’s also lost the ability to borrow using Britain’s credit ratings, and borrowing from the UK essentially and funding their bailout schemes.
“The economics of the EU are simply all wrong.
“It has a single currency that doesn’t work, that has actually created more divergences between the wealthy nations in the north and the poorer nations in the south.
“Countries such as Greece now have 200 percent debt to GDP ratio, Italy is up to 130 percent and the situation is getting worse.
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“It is not something that works economically so fundamentally it will decline and fizzle away.
“90 percent of global growth when we are past this pandemic will come outside of the EU. It is going backwards and it will become less and less important.”
Meanwhile, for the UK, the country’s borrowing figure was lower than expected due to Brexit, according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
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He told the BBC that the vanishing of contributions to the EU’s budget, which totalled £2.2bn in January 2020, has boosted Britain’s financial outlook.
Last year, experts from Carnegie Endowment for International Peace said: “The UK’s departure leaves enormous political and financial gaps in the EU.
“Power in the bloc will shift toward Germany and especially France led by a dynamic and ambitious President Emmanuel Macron.
“Moreover, the loss of the union’s biggest non-eurozone member will move the centre of gravity more toward the eurozone members, will leave a €75billion hole in the EU budget, and will raise questions about the EU’s future direction.”
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