The European Union could lose its second-largest economy if the UK decides to leave, taking a potentially major economic and political blow at a time when the EU already faces slowing economic growth and an ongoing refugee crisis.
The UK is scheduled to hold a referendum on June 23 asking voters whether they want Britain to remain a part of the to the 28-nation economic bloc. If there is a vote in favor of the so-called Brexit, the EU would lose about $3 trillion in GDP. The move would also be unprecedented, since no country has left the EU.
«There would be a very big impact,» said Mark Fleming-Williams, economic analyst at Stratfor Global Intelligence, a geopolitical advisory firm. «We’ve seen the markets’ fear come down on the pound. Sterling has been dropping significantly in the last month. I think as the vote gets closer, it will probably extend to the euro.»
The U.S. and the UK, aside from being closely linked because of their history, are close trading partners. Last year, the UK ranked fifth in U.S. exports, importing $56.35 billion worth of U.S. goods, according to the Commerce Department.
Nonetheless, the impact of a Brexit on the U.S. likely would be limited, said Scott Brown, chief economist at Raymond James. «I wouldn’t expect it to be a huge drag on [U.S.] growth, but it certainly isn’t helpful.»
Atlantic Council’s Dungan doesn’t expect an adverse effect on the U.S. economy, either.
«There’s a tendency to think that the UK plays an intermediate role between the U.S. and the EU. This is simply not true,» he said. «One good example of this is GE buying half of Alstom.»
General Electric bought the French multinational’s power business for approximately $14 billion, after the deal was approved by the EU.