“I don't think the country’s going to be governed right, under these circumstances.”by Jay Elwes / May 8, 2015 / Leave a comment
Published in June 2015 issue of Prospect Magazine
“The Brexit issue is just going to become dominant and it is the most important issue… for the British economy,” said Adam Posen, President of the Peterson Institute, the US think tank. Posen, a former member of the Bank of England’s Monetary Policy Committee, which sets UK interest rates, and who sits on the panel of economic advisers to the US Congressional Budget office was speaking in the immediate aftermath of Thursday’s general election.
His comments reflect international wariness of the electoral result, which brings closer the possibility that Britain’s relationship with Europe—and, says Posen, by association the US—will undergo fundamental change.
In his victory speech, delivered outside Number Ten Downing Street, David Cameron told a crowd of journalists that “yes we will deliver that in-out referendum,” on membership of the EU. If Britain were to hold a referendum and if the vote led to departure, the country would arrive at “something close to irrelevance,” said Posen. It would mark Britain out “as very nationalist, in the same way we used to talk about the US isolationists.” Once outside the EU, Britain would be “less valuable and a less dependable partner and in economic terms it makes it a far less attractive destination for corporate investment in the non-financial sector.”
“I think that this, combined with the cutbacks in defence spending and the flop to suit the Chinese on the AIIB [the Asian Infrastructure Investment Bank]—it all feeds a narrative that this is turning into little England from Great Britain,” said Posen. “And Little England is of very little consequences to the Americans.”