UPDATE 2-Osborne wins US backing in pushing Brexit onto G20’s top risks – Reuters

8 months ago Comments Off on UPDATE 2-Osborne wins US backing in pushing Brexit onto G20’s top risks – Reuters

* Osborne pushed to add Brexit to G20 list of risks,
officials say

* Lew warns Brexit would harm U.S., British economic

* Lew’s comments represent major boost for Cameron

(Adds comments from IMF’s Lagarde, Lew’s previous views on

By Jan Strupczewski and Brenda Goh

SHANGHAI, Feb 27 British finance minister George
Osborne pushed financial leaders from the top 20 economies to
include the risk of Britain leaving the European Union in their
list of dangers to the world economy on Saturday, gaining
explicit support from the United States.

Britons will vote in a referendum in June 23 on whether to
remain part of the 28-nation EU.

British Prime Minister David Cameron negotiated a special
status for Britain in the bloc last week to help convince
eurosceptics that continued membership was more beneficial than

The risk of Britain exiting the EU, dubbed “Brexit”, was not
in the original draft of the communique of finance ministers and
central bankers of the top 20 economies, but was added on the
insistence of Britain, G20 officials said.

In a significant boost for Cameron and Osborne, U.S.
Treasury Secretary Jack Lew expressed clear support for
Britain’s continued membership of the EU.

“Our view is that it’s in the national security and economic
security of the United Kingdom, of Europe and of the United
States for the United Kingdom to stay in the European Union,”
Lew told a news conference.

Lew’s references to economic and national security marked a
strengthening in his rhetoric, having previously described
Britain’s EU membership as being in the global interest.

“This is an issue that will be decided by the voters of the
United Kingdom in June and we certainly hope that (they) reach
that conclusion,” Lew said.

The final G20 communique, seen by Reuters, lists “a shock of
a potential UK exit from the European Union” as one of the risks
to the global economy, alongside volatile markets, cheap
commodities and the migration crisis.

“It was the British who called for it, but it didn’t meet
with opposition,” one G20 official said. “Everyone around the
table would rather avoid a shock of that sort at such a fragile
time for the global economy.”

Osborne said finance ministers and central bank governors
were unanimous in their belief that a British departure from the
European Union could cause a global economic shock.

Christine Lagarde, managing director of the International
Monetary Fund, confirmed that delegates discussed a British
departure from the EU as a downside risk for the global economy
in their meeting.

“That’s the reason why it found its way (into the
communique) as soon as the meetings effectively started,” she

Some G20 officials saw the inclusion of the line on Britain
in the communique as a way to draw attention to the negative
consequences of exiting the EU to support Cameron’s campaign to
stay in.

Italian Finance Minister Pier Carlo Padoan said a decision
by Britain to leave the EU, which it joined in 1973, would have
negative global consequences.

“We would classify a UK exit from the EU as a powerful
geopolitical shock, a negative shock,” he told reporters in

The City of London is a major global financial centre,
accounting for roughly 10 percent of Britain’s gross domestic
product (GDP) and some bankers think leaving the EU could
disrupt business and force many financial institutions to move

Opinion polls in Britain differ over the likely outcome of
the June 23 referendum. Uncertainty about Britain’s future in
Europe sent its currency to a seven-year low against the U.S.
dollar earlier this week.

(Additional reporting by Andy Bruce in London; Editing by Helen
Popper and David Evans)

UPDATE 2-Osborne wins US backing in pushing Brexit onto G20’s top risks – Reuters