World Economy

UK Should Leave ‘Sinking’ EU

UK Should Leave ‘Sinking’ EUUK Should Leave ‘Sinking’ EU

The European Union is too big and is “sinking,” and the United Kingdom should take the chance to get out while it can, economist David Malpass said Friday.

British citizens vote next Thursday on whether Britain should exit the union.

“The EU is just too big. It’s too expensive. It doesn’t work,” the president of Encima Global said in an interview with CNBC’s “Power Lunch.”

“They haven’t even made progress on their mission, which was fiscal responsibility, banking reforms, defending the external borders. They’re just not doing the job.”

He believes the Brits should not squander the opportunity, noting that the last referendum the country held was in 1975. “These opportunities come along once in a generation where people actually get to vote on what they want.”

However, Gregory Daco, chief US economist for Oxford Economics, believes a Brexit would be negative for the UK economy, as well as the EU economy.

“It might not have that much of an impact on the US economy per se, but overall I think it would be a negative, especially in the short run,” he told ‘Power Lunch.’ “It would hamper trade. … It would also hamper investment.”

The US stock market will also not be immune to next week’s vote.

Todd Colvin, senior vice president of global institutional sales at Ambrosino Brothers, said if the UK leaves, it will open Pandora’s box a little bit. “We’re going to see bonds continue to rally. We’ll probably see equities sell off and gold. Don’t forget gold is out there—it’s been rallying very strong and that’s been a great indicator for the risk-off trade.”