World Economy

Brexit risk 'concerns the whole world': Lagarde

Significant benefits from being in EU: Lagarde
Of course the EU isn’t perfect: Lagarde
Europe is in process of strengthening: Lagarde

The potential risk of a Brexit after the June 23 referendum on European Union (EU) membership is "a concern for the whole world," International Monetary Fund Managing Director Christine Lagarde told CNBC.

"It's a concern not just for the U.K., by the way, it's a concern for the world," she told CNBC on Friday when questioned about the potential impact of the U.K.'s referendum on EU membership next week.

" I have not attended any meetings in the last three or four months with any leader, any policymakers or any body where the question of the impact of the U.K. withdrawing was not asked."

"There has been a huge focus on the downside and not much on the benefits and upside," Lagarde said on Friday. "There have been significant benefits (for the U.K.) arising from being part of a single market."

`"It's a pretty overwhelming case when you have a huge body of economists (that agree) that it's going to cost (the U.K.), it's going to be negative for income purposes, it's going to reduce trade most likely as a result of uncertainty and those are blatant facts… When one economist disagrees with another, that's life, but when they all agree ... that's a pretty compelling situation."

"The U.K. has been, is, and I hope will continue to be a champion of (doing things in a) faster, quicker, less bureaucratic and more efficient (way)," she said, adding that she hoped Europe would continue to try to perfect itself.

Lagarde was speaking to CNBC in Vienna where earlier in the day she had presented a speech on European unity.

The speech, entitled "Unity in Diversity: The Case for Europe" is timely given rising populism and Euroskepticism in the 28-country European Union (EU), a continuing refugee crisis, economic uncertainty and a forthcoming U.K. referendum on EU membership.

If Brexit happens, this could happen...

U.K. opinion polls show a very tight race between the leave and remain camps and should a so-called Brexit occur, it could precipitate political upheaval in the bloc.

The IMF's Lagarde said in her speech that Europe needs to come together now more than ever.

"Right now, too many Europeans are worried about their cultural identity, their security, their jobs, incomes, and living standards. And too many of them are led to believe that things would be better if only Europe returned to closed borders and economic nationalism," she said, according to extracts of the speech released by the IMF.

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