Ifo chief warns eu against overreaction against london

ifo chief warns eu against overreaction against london

Ifo president clemens fuest has defended the uk and warned the eu against a "punitive expedition" in response to the brexit vote. With insulted reactions, europe would harm itself and "only accelerate the disintegration of the EU," the economist said.

"I would consider this a historic mistake." Fuest thus contradicts other economic researchers.

Fuest said london’s desire to apply to leave EU only after negotiations on future relationship is understandable. Because some europeans wanted to exclude great britain – for their own economic or political interests or so that no other country would follow the british example.

However, the EU must not jeopardize the internal market, but must do everything in its power to "jointly minimize the damage to europe," fuest demanded.

As with switzerland, it was possible to negotiate with great britain to what extent a restriction on immigration must mean a restriction on access to the domestic market. "These negotiations must be conducted without foaming at the mouth," warned fuest. A hard cut would harm germany and europe.

The head of the institute of the german economy in poland, michael huther, said that no one was foaming at the mouth, nor was it a matter of punitive expeditions. "We have to take the brits seriously: they want to leave," huther told dpa. The EU’s four fundamental freedoms were non-negotiable. The economist rejected the notion that britain continues to benefit from the free movement of goods, services and capital – but at the same time restricts the free movement of people.

"Anyone who unilaterally creates an imbalance is setting an explosive charge against the entire union," huther warned. Because other members could then want to follow the british example. According to EU law, it is also not possible to negotiate first and then apply to leave. Moreover, the swiss example is not transferable to the united kingdom. After the british referendum on leaving the EU, the DIW also called for a clear cut and warned against giving london "a good deal.