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A British Test of Reason

If voters in the UK decide in the country's referendum on June 23 to leave the EU, it will not be for economic reasons; indeed, it is more than apparent that Brexit would carry huge economic costs. So why does the outcome of the vote remain far from certain?

PARIS – If voters in the United Kingdom decide in the country’s referendum on June 23 to leave the European Union, it will not be for economic reasons. They may choose Brexit because they want full sovereignty, because they hate Brussels, or because they want migrants to return home, but not because they expect great economic benefits.

The pro-Brexit camp initially appeared to be holding two strong economic cards. The first was UK citizens’ overwhelming rejection of their country’s net fiscal transfer to the rest of the EU, which currently amounts to 0.4% of GDP. Since Prime Minister Margaret Thatcher first demanded to have “her money back” in 1979, the budgetary costs of EU membership have completely overshadowed its economic benefits in the public’s view.

The second card was the sorry state of continental Europe’s economy. In terms of GDP growth, employment, or innovation, other EU countries, on average, lag behind the UK (and, to an even greater extent, the United States). Whereas EU membership was once regarded as a gateway to prosperity, it is increasingly viewed as a drag on progress.

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