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Speaking in Washington on Thursday to mark the start of the IMF’s annual meeting, Lagarde said negotiators had to put the interests of people before those of business, and that there was a need to end uncertainty. [...]
Asked what she thought the impact on Europe would be of Britain falling back on World Trade Organisation rules, Lagarde said: “I just cannot imagine that that will happen, because for the people themselves, what does it mean?
“The Europeans who are based in the UK and the British who are residing in the EU, WTO does not provide for such eventualities.
“When I think of the airline industries, the landing rights in various European countries … There is so much that has been brought together between the continent and the UK that it requires a very specific approach which will reduce the uncertainty that is damaging potential.”
The IMF considers a cliff-edge Brexit to be one of the main risks to what Lagarde called a fragile recovery in the global economy. Although the fund’s prediction of an immediate recession following the EU referendum in June 2016 proved overly pessimistic, it has revised its UK forecasts for 2017 and 2018 down since the start of the year, while becoming more upbeat about the eurozone.
“Brexit is an ongoing process and our hope is that it be conducted promptly to reduce the level of uncertainty and the anxiety of people about the outcome and the situation of people first, of business second. Because this is affecting the people and the businesses,” she said.
Lagarde said she supported Theresa May’s idea of an implementation period of about two years after Britain’s formal exit from the EU, but that there also needed to be progress on the EU’s three key issues: money, citizens’ rights and the Irish border. [...]