President of the European Central Bank (ECB), Mario Draghi, has said to MEPs that the EU is prepared for “all contingencies following the UK’s EU referendum on 23rd June.
Throughout the referendum, the future of the British economy has frequently been called into question, with many on the remain side of the argument suggesting that the UK risked years of uncertainty by leaving.
In his second monetary dialogue in a year with the Economic and Monetary Affairs Committee, Mr Draghi refused to indicate whether or not he thought Britain would vote to leave the EU, but he did admit that “it is difficult to foresee the various dimensions of the vote on the markets and the euro area economies.”
He added that he would be “prepared to use every available tool to protect the eurozone should the UK decide to leave.”
Mr Draghi, who as head of the ECB is one of the most important bankers in the world, was joined by Janet Yellen, the chair of the US Federal Reserve, who warned that “in a world marked by sluggish growth, weak inflation and low interest rates investors could quickly become more risk averse.”
Mrs Yellen said that “a UK vote to exit the European Union could have significant economic repercussions,” adding “it could launch a period of uncertainty and negative economic consequences for the UK spilling over into Europe.”
At the same time, Mr Draghi asserted that “uncertainty remains high” and that “downside risks are still significant due to the continued fragile state of the global economy and geopolitical developments.”