Yesterday in the Daily Telegraph, Mehreen Khan reported the Dutch bank ING’s claim that Britain leaving the European Union would ‘wipe off’ up to 0.3 per cent of GDP from the euro’s 19 economies in less than two years.
0.3 per cent! Three parts in a thousand! It is difficult to express the horror that that such a prospect evokes. Perhaps.
Governments do not create growth in GDP, still less does the EU. Economic growth results from free agents — corporations and individuals — contracting agreements to purchase and supply with each other. The best that governments can do is facilitate a level playing field for free exchange, and minimize economic distortions — through tax for example.
According to the Centre for Economics and Business Research, Britain will become the world’s fourth largest economy — ahead of Germany and Japan — in the next twenty years. According to IMF estimates, UK GDP will increase from $2.7 trillion in 2015 to $6.0 trillion in 2035. Our children and grandchildren will be — more or less — twice as wealthy as we are in twenty years’ time.
0.3 per cent off GDP in the eurozone is rather beside the point.