Jamie Dimon, the CEO of massive US bank JP Morgan, is the latest big wig from the world of finance to give his opinions on Britain’s referendum about its EU membership, warning that the potential outcomes of Brexit — Britain leaving the EU — could be “large and potentially unknown”.
In his annual letter to JP Morgan’s shareholders, Dimon discussed everything from liquidity in the bond markets, to the “serious issues” facing the USA, but his comments on a potential Brexit are particularly fascinating.
Britain goes to the polls on June 23rd, and currently the in and out votes are pretty much neck-and-neck, with two recent polls showing just one point difference between leave and remain. As the campaign hots up, more and more big companies and figures are giving their opinions, with many backing Britain’s remaining in the EU.
Earlier this week Airbus sent a letter to all its UK staff warning about the dangers of Brexit, and a poll showed that the majority of businesses surveyed by the Council of British Chambers of Commerce in Europe back the remain campaign.
And now Dimon is the latest to weigh in arguing that even in the best case scenario Brexit “will result in years of uncertainty, and this uncertainty will hurt the economies of both Britain and the European Union.” That he says would happen even if “Britain can quickly renegotiate hundreds of trade and other contracts with countries around the world including the European Union”
In a “bad scenario” but “not the worst case scenario”, Dimon says Brexit would cause “trade retaliation against Britain by countries in the European Union is possible, even though this would not be in their own self-interest. Retaliation would make things even worse for the British and European economies. And it is hard to determine if the long-run impact would strengthen the European Union or cause it to break apart.”
While Dimon argued that Europe would suffer if Britain left the EU, he did acknowledge that those arguing for Brexit have a point, saying: “One can reasonably argue that Britain is better untethered to the bureaucratic and sometimes dysfunctional European Union. This may be true in the long run”.
However, Dimon ended his comments on Brexit by striking a philosophical tone. Here he is once more: “The European Union began with a collective resolve to establish a political union and peace after centuries of devastating wars and to create a common market that would result in a better economy and greater prosperity for its citizens. These two goals still exist, and they are still worth striving for.”