"Emerging markets are bleeding capital on a scale unseen since the Asia crisis in 1998"by George Magnus / March 1, 2016 / Leave a comment
Read more: Will China drag down the world economy?
Nobody really expected the G20 meeting of finance ministers and central bankers in Shanghai last weekend to change the way the world works. Yet, given the long list of things that have been draining confidence and optimism from the global economy, it is especially disappointing that we are left wondering whether policymakers are co-ordinated enough to begin finding solutions to them. Some of the things that those at the G20 meet highlighted as major risks could indeed be mitigated if policymakers agreed to concrete action steps. And that goes as much for economic and exchange rate stability as it does for newer geo-political threats, such as migration in the EU.
But the prize for most bizarre addition by the G20 to its list of “things to worry about” goes to Brexit. This isn’t because we shouldn’t worry, but because our Chancellor George Osborne somehow managed to persuade a disparate group of 18 other participant countries (the EU is the 20th) to express in the communique the significance of a risk that his government created in the first place by agreeing to hold a referendum on our membership of the European Union. Be that as it may, the possibility of Brexit certainly is something that now constitutes a threat beyond the rather parochial concerns to which the referendum debate has already fallen victim.
Under the best of circumstances, the risk of Britain leaving the EU may have had awkward or aggravating consequences, depending on your point of view. But the circumstances are dire. Brexit would tear at the integrity of the EU, already weakened due to mass immigration, or more specifically its failure to handle the phenomenon adequately. If other countries followed Britain’s example, and sauve qui peut became the new motif for Europe, we really would be back in an even darker age. It’s that risk that…