EU economies are faltering, and the costs of Brexit are exaggerated

In an exclusive podcast interview with Briefings for Brexit, Ashoka Mody tells them why he believes the EU has failed to keep up with growth in other parts of the developed and developing world, and why this has led to protest and anti-establishment movements and the fragmentation of political systems throughout Europe.

Ashoka elaborates saying that Germany’s lack of investment in science and industry has seen them fall behind the other developed economies which could see them “descend into a second tier economy”.

On Brexit, Ashoka believes that the appeal of a free trade agreement now plays second fiddle to the issue of sovereignty in the eyes of us brexiteers, and while leaving with no deal will cause some short term costs, the long term future of a life outside of the EU looks bright:

“The drop in GDP growth in the short term may seem large but it is not large. Where I disagree with the proponents who believe in staying in the European Union, who claim there will be large long term and enduring costs, I don’t believe that to be the case. I think that those estimates of long term enduring costs are over-stated and greatly over-stated based on a faulty empirical basis. That’s the crucial political economy decision that Britain will eventually make. Is it worth paying the short term costs to have a greater sense of sovereignty or as some Remainers might argue, the gain may be less than we perceive and the costs maybe greater, whereas the Leavers will say the costs are not really large and the gains greater? That is really the trade-off,”

Ashoka Mody, is Visiting Professor of International Economic Policy, Princeton University and author of Euro Tragedy: A Drama in Nine Acts (Oxford University Press).