You are here

Britain's EU membership 'mutually beneficial': Draghi

Euro11.jpg
European Central Bank chief Mario Draghi pressed the case for Britain to stay in the EU on Thursday, warning that doubts over its membership are already buffeting the markets.

[FRANKFURT] European Central Bank chief Mario Draghi pressed the case for Britain to stay in the EU on Thursday, warning that doubts over its membership are already buffeting the markets.

Mr Draghi vowed to keep touting the benefits of Britain's EU membership ahead of a knife-edge June 23 vote that could lead to the country's exit, or Brexit, with far-reaching economic consequences.

"Let me say unequivocally that we view the participation of the UK to the European Union as mutually beneficial and we will continue to say so in the coming weeks," Mr Draghi told a news conference after an ECB policymakers' meeting.

Talk about a possible Brexit "has already produced some significant consequences on the markets", in particularly hurting the value of sterling, Mr Draghi said.

"We do expect continuation of market volatility certainly until the referendum ... probably even after the referendum," he said, while stressing that he did not want to speculate about the result of the vote.

As Prime Minister David Cameron tries to turn the tide in favour of staying in the EU, Britain's Treasury this week warned that Brexit could leave an average household 4,300 pounds (S$8,309) worse off.

US President Barack Obama is expected to lend his weight to the pro-EU campaign after he touches down Thursday on a visit to Britain, possibly at a joint press conference with Mr Cameron on Friday or at a town hall-style meeting with British youngsters on Saturday.

Mr Obama has consistently said he favours a strong Britain in a strong EU and aides say he is likely to reinforce that message.

With opinion polls showing the "Leave" and "Remain" camps evenly split at around 50 per cent each, the Group of 20 top world economies last week warned that one of the risks to the global economy was "the shock of a potential UK exit from the European Union".

In Frankfurt, Mr Draghi said a recovery in the eurozone economy was probably safe, however.

"Is it enough to endanger the economic recovery in euro area? The assessment of our staff is that the risk of this happening is limited," Mr Draghi said.

That assessment contrasts with the Treasury's report on the economic cost to Britain.

Brexit could shave six percentage points off Britain's growth by 2030 and the annual loss of gross domestic product to each household could be as high as 4,300 pounds, it said.

Finance Minister George Osborne warned that the country would be "permanently poorer if we leave the European Union" and it was "complete fantasy" to expect that Britain could then negotiate an advantageous trade deal with the EU.

Around a fifth of voters remain undecided after the campaign officially got started last week.

AFP