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Brexit might be a necessary evil for EU's political future - Allianz's El-Erian

By Andrew Schonberg

Date: Tuesday 07 Jun 2016

Brexit might be a necessary evil for EU's political future - Allianz's El-Erian

(ShareCast News) - A Brexit vote that sees UK quit the European Union later this month might be a necessary evil that secures the political bloc's future, even if at the price of short-term volatility, says Mohamed El-Erian, chief economic adviser at Allianz.
With his self-confessed contrarian view, El-Erian told money managers at the FundForum International in Berlin that a so-called Brexit outcome to the UK's 23 June referendum could resolve some key issues within the single-currency bloc, reported MarketWatch.

Such an outcome might even resolve one of the EU's basis inconsistencies, he contended.

"There are two fundamental divisions of the EU: There's the British view - that it's a super free-trade zone, that it's a destination," El-Erian was cited by MarketWatch as saying.

"Whereas the Germany-France view is that it's a means to something else - to an ever closer union. These are fundamentally two very different views on what the EU is about."

He went on to state that in the case of a so-called Bremain outcome, these issues would not be resolved.

"It means we are going to have tensions over and over again, because they are pursuing two different objectives, within one institutional agreement.

"So, ironically, over the longer term, an exit may actually solve one of the basic inconsistencies of the European Union."

Back in England, an opinion poll out today -- this one by The Telegraph/ORB -- revealed 52% of Britons favoured remaining in the European Union, against 40% who wanted to leave.

This result was at odds with others. On Monday, Digital Look reported that the most recent Observer/Opinium, YouGov/ITV and TNS polls revealed more Britons favoured leaving the EU.

Both sides of the debate have committed to campaigns of rhetoric; the Bremainers have warned of significant financial instability, while Brexiters have predicted a stronger domestic economy ahead.

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