G7 Summit: Brexit a serious risk to global growth

The Dollar Business Bureau

Ahead of a British vote to leave the EU next month, the G7 leaders on Friday warned that a British exit from the European Union (EU) would pose a serious threat to global economic growth.

"A UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth," G7 leaders said, in a 32-page declaration issued at their summit in Ise-Shima, Japan.

The 32-page declaration also talked about non-economic threats emerging out of the probable situation, which highlights other concerns such as geopolitical conflicts, the refugee crisis and terrorism.

The G7 (Canada, France, Germany, Italy, Japan, the UK and the US) leaders also agreed to a communiqué which reiterated that global growth is their urgent priority.

“Taking into account country-specific circumstances, we commit to strengthening our economic policy responses . . . and to employing a more forceful and balanced policy mix, in order to swiftly achieve a strong, sustainable and balanced growth pattern,” it said.

Earlier, the International Monetary Fund (IMF) had also underlined there were no economic positives to the UK leaving the EU. The Bank of England had said the economy would reduce sharply, creating possibilities of even a brief recession.

The Organisation for Economic Co-operation and Development (OECD) had also warned that if British voters vote to leave the EU, they will end up paying a "Brexit tax" as much as a month's salary by 2020.

Last week, G7 finance leaders had wished Britain stayed in the EU, but they said they could just hope for that to happen.