The debate in the UK over whether the nation’s best interests lie within the EU or not has been sorely lacking in detail with those favouring continued membership warning of a step in the dark and those campaigning to leave claiming that everything will be OK and it will pretty much be business as usual if the UK leaves, but migration problems will end, sovereignty will return and trade deals will be painlessly and quickly negotiated.
The International Monetary Fund (IMF) has now weighed into the debate albeit without much factual evidence, coming down strongly on the side of those wishing to remain. The IMF cautions that a Brexit would cause “severe regional and global damage” result in the disruption of trading relationships and pose “major challenges” for both the UK and the remaining EU. They note that the decision to hold a referendum has already generated uncertainty for investors and that a vote to leave would exacerbate this (in the near future, at least).
In contrast to the leave campaigners, the IMF believes that post-exit negotiations would be protracted and "could weigh heavily on confidence and investment, all the while increasing financial market volatility" and "disrupt and reduce mutual trade and financial flows".
The Chancellor and the PM both welcomed the IMF comments with the PM Tweeting (dear God…) "The IMF is right - leaving the EU would pose major risks for the UK economy. We are stronger, safer and better off in the European Union" and George Osborne commenting: "The IMF has given us the clearest independent warning of the taste of bad things to come if we leave the EU."
Vote Leave helpfully commented that the IMF has been “been consistently wrong in past forecasts about the UK and other countries” – which is a little harsh. In general, commentators favouring exit have implied that the IMF has a pro-EU stance which explains its position. However, they have provided no compelling arguments as to why the EU would grant the UK as favourable a trading position as it enjoys currently were it to leave the union and not join EFTA (which would require it to accept unfettered migration and observe all of the EU’s trade directives without any say in their creation, and pay reduced dues to the EU). Such a position is, of course, nonsense. They deliberately underplay the politics that would prevail within the remaining EU states should the UK leave: remaining states would have to sell any generous post-membership deal with the UK to their own citizens, many of whom are also sceptical about the merits of EU membership.