Clemens Fuest has a special relationship with the British. He spent five years in Oxford, where he taught economics. And the 48-year-old has also come to appreciate the country because it is “more liberal and cosmopolitan than any other country” he knows.
So the night the British decided to leave the EU in June last year was a big one for the head of the Ifo Institute for Economic Research, one of Germany’s most influential economic research organizations. “When I saw what had happened, I realized that Europe had changed fundamentally,” he said in an interview with Handelsblatt. And the more time passes, the more certain he is that his assessment is right.
Mr. Fuest has been the head of the Ifo since April 2016. The Munich-based institute publishes a monthly economic climate index, which has an impact on international markets. Before taking up his Ifo role he headed the Center for European Economic Research, ZEW, in Mannheim. He was also chairman of the Council of Economic Advisors at the German finance ministry from 2007 to 2010.
Speaking to Handelsblatt before the British vote took place on Thursday, he explained his views on the ramifications of Brexit for Britain and the European Union.
Commenting after the vote, he said: “The election result is bad news for the economic outlook on both sides. Uncertainty about Brexit will increase. The expectation that a hard Brexit becomes less likely may be optimistic.”
Handelsblatt: Mr. Fuest, you are viewed as one of the great warning voices against a Brexit. You urged people not to underestimate its economic consequences. Yet the country’s most recent economic data were not half bad. Was the whole thing not so terrible, after all?
Mr. Fuest: I was talking about lower growth, and I would say the same thing today. It’s most likely to become noticeable if no agreement at all materializes. That would cause growth to take a hit in the short term, and in the medium term the country would see substantial losses in wealth.
https://global.handelsblatt.com/politics/germanys-hard-brexit-779174
