Osborne pushes Brexit onto G20 list of risks to global economy

Britain will vote in a referendum in June whether it wants to remain part of the 28-nation EU


Reuters February 27, 2016
(L to R) Organisation for Economic Co-operation and Development (OECD) Secretary-General Jose Angel Gurria, US Federal Reserve Board Chair Janet Yellen and British Chancellor of the Exchequer George Osborne chat as they pose for a "family photo" for the G20 Finance Ministers and Central Bank Governors Meeting at the Pudong Shangri-la Hotel in Shanghai on February 27, 2016. PHOTO: AFP

SHANGHAI: British finance minister George Osborne pushed to include the risk of Britain leaving the European Union onto the list of risks to the global economy agreed by financial leaders of the top 20 economies on Saturday, G20 officials said.

Britain will vote in a referendum in June whether it wants to remain part of the 28-nation EU.

British Prime Minister David Cameron negotiated a special status for Britain in the bloc last week to help convince Eurosceptics that continued membership would benefit the United Kingdom more than leaving.

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The risk of Britain exiting the EU, dubbed "Brexit", was not in the original draft of the communiqué of finance ministers and central bankers of the top 20 economies, but was added on the insistence of Britain, G20 officials said.

The final G20 communique, seen by Reuters, lists "a shock of a potential UK exit from the European Union" as one of the risks to the global economy, alongside with volatile markets, cheap commodities and the migration crisis.

"It was the British who called for it, but it did not meet with opposition," one G20 official said. "Everyone around the table would rather avoid a shock of that sort at such a fragile time for the global economy," the official said.

Some G20 officials also saw the inclusion of the line on Britain in the communique as a way to draw attention to the negative consequences of exiting the EU to support Cameron's campaign to stay in.

Italian Finance Minister Pier Carlo Padoan said that a decision by Britain to leave the EU would have negative global consequences.

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"We would classify a UK exit from the EU as a powerful geopolitical shock, a negative shock," Padoan told reporters in Shanghai.

The City of London is a major financial centre for world finance, accounting for roughly 10 percent of Britain's GDP and some bankers believe that leaving the EU could disrupt business and force many financial institutions to move out.

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