DHAKA: Citigroup Inc. chief economist Willem Buiter placed about a one-in-three chance on the UK voting to exit the European Union, as Prime Minister David Cameron struggles to wring concessions from his EU partners.

Speaking to reporters in Dublin on Monday, Buiter said it’s ‘pretty likely’ the UK vote will be held in the summer, adding that investors are only beginning to recognize the ‘serious risk’ of a ‘Brexit’.

Should the UK opt to leave the bloc, the EU would seek to negotiate tough exit terms, Buiter said, reports bloomberg.com.

An exit would be ‘be a disaster for Britain’, said Buiter, who sees a 35 percent chance of this happening. ‘To discourage a repeat, the 27 remaining EU members would strike an extremely tough bargain with the UK. It would be years of destructive uncertainty’.

Cameron told the BBC’s ‘Andrew Marr Show’ on Sunday that he is aiming to reach a deal on the UK’s membership in the EU next month, paving the way for a national vote on whether to withdraw from the bloc soon after.

The British government wants the EU to cut its bureaucracy and trade barriers, to differentiate between rules for countries inside and outside the euro area and to limit benefits for immigrants.

Buiter said a potential terror attack in the UK in the run-up to a referendum could boost support for exiting the bloc.

‘If ISIS pulls a Paris in a British city within two months of the referendum, the emotional response could well be Brexit, even though the logical conclusion would be let’s strengthen the EU quickly,’ said Buiter.

‘People will vote on the belief that if ugly foreigners blow us up, then the EU is just another bunch of ugly foreigners, we don’t want them either.’

BDST: 1703 HRS, JAN 12, 2016
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