Roger Bootle, one of Britain’s top economists and managing director of Capital Economics, just dubbed the eurozone a “complete disaster” and claims a Brexit would be good for the UK economy.
In an interview with MoneyWeek to promote his new book ‘The Trouble With Europe’, Bootle says: “I think the eurozone is a complete disaster and I’m not a Johnny-come-lately on this subject I was saying it right from the beginning.”
Bootle believes the grouping together of uncompetitive nations like Spain and Greece with industrious and fiscally strict countries like Germany and the Netherlands makes the Union completely dysfunctional.
His comments come despite data yesterday showing Europe’s GDP is now growing faster than both the UK and the US. Germany’s economy also appears to be faltering, with GDP missing forecasts and growing just 0.3% in the first quarter of the year.
Meanwhile, Spain is enjoying a period of recovery, growing 0.9% in the first quarter, while other underperforming economies such as Italy and France are bouncing back. Italy has returned to growth for the first time in a year and France grew by a forecast-beating 0.7% in the first quarter.
Bootle says: “What the euro has done is it’s locked together these two groups of countries that behave fundamentally differently. In the old days the exchange rate acted as a flex, a hinge, enabling those two sorts of countries to work together. Without out it well you’ve got this ghastly stagnation.”
Bootle calls for Britain to leave the European Union, saying the impact of a Eurozone exit is being overestimated. He believes deregulation in the wake of a Brexit could boost the economy, while increasing regulation in the Union means it will grow more costly to Britain over time if we stay.