The U.K. referendum on its membership of the European Union is the greatest risk facing the region, the vice-chair of financial services firm Allianz Global Investors told CNBC.
Elizabeth Corley, the global CEO at Allianz Global Investors, said that it was a "very, very significant issue" regardless of the outcome of the vote on June 23.
"If you think about the distraction value as a minimum for the whole of Europe of dealing with the referendum," she said on the outskirts of the Ambrosetti Workshop in Italy on Friday.
"You think of the consequences of the U.K., the economic consequences over which there is significantly less debate over some of the national identity issues."
Allianz Global Investors, owned by the German insurance giant Allianz, has 454 billion euros of assets under management. Corley described herself as "very pro-Europe" and said it would be fantastic if Britons voted to stay inside the European bloc.
"The EU is our largest trading partner, we have a huge trade surplus from services. Services are highly regulated and under any scenario they'll remain regulated," she said.
She added that a vote to leave would lead to an "annoying divorce" from the Union and estimated that the renegotiation of trade deals would take "at least five to 10" years and would distract policymakers from creating growth.
"There won't be an amicable divorce," she added.
Bookmaker Ladbrokes is currently predicting there's a 33 percent chance that Britons will vote to leave the European bloc at the upcoming referendum. The fierce debate has strained relationships and seen major political heavyweights like Prime Minister David Cameron and London Mayor Boris Johnson put forward opposing views.
Analysts at Credit Suisse in January said a so-called "Brexit" would result in an "immediate and simultaneous economic and financial shock for the U.K." It added that it could see a drop in business investment, hiring and confidence. The CBI (Confederation of British Industry) released new independent research last week showing it could cost the economy £100 billion ($142 billion) and 950,000 jobs by 2020.
Meanwhile, the "leave" campaign point to pressures on the U.K.'s state-run national health service, the threat of terrorism and the costs of EU membership. The current concerns over the country's steel industry has added more fuel to the debate with some claiming tight EU regulations has limited the government's response.