UK Independence Party supporter poses in Sittingbourne as leader Nigel Farage campaigns for Brexit on Monday.
Noting that “the past is certain, the future obscure,” ancient Greek scientist Thales of Miletus could not have imagined that reliance on doubtful “Greek statistics” during the ongoing Brexit campaign would have obscured voters' ability to make up their minds in a well-informed manner. “Greek statistics” gained notoriety and were discredited in 2009 when the newly elected PASOK government announced that Greece’s budget deficit, at 12.7% of the country’s GDP, was almost 7 percentage points higher (!) than the figure reported by the outgoing ND administration only a month earlier.
“Greek statistics” are now used by the Brexit camp. Take, for instance, the Brexiters' central claim that Britain sends 350 million pounds a week to Brussels. Money which, according to them, could be used instead to build a new hospital. A detailed analysis by David Smith, the economics editor of the Sunday Times, indicates that the true figure is (not even) half of that.
The Leave camp also appear to be following Greece's lead with reference to what is going to happen after the referendum. Michael Gove (Boris Johnson's No. 2 in the Brexit camp) said that even if it votes to leave the EU in this month’s referendum, Britain won't do so before 2020. It is not clear whether this has to do with cumbersome and lengthy Brexit negotiations or the (wishful) thinking of the Leave camp that it could use the outcome of the referendum to renegotiate a better Remain deal with the EU, which would then “justify” a new referendum. It should not go unnoticed, however, that Mr Gove’s statement brings to mind what followed the outcome of the Greek referendum in July 2015, when, despite an overwhelming 61.3% majority in favor of rejecting a deal with Greece’s troika lenders (namely the European Commission, the European Central Bank and the International Monetary Fund), Greek Prime Minister Alexis Tsipras ruthlessly proceeded by endorsing almost the very same deal that Greek voters had objected to.
If the Brexiters win, I suspect that David Cameron will step down at once. Indeed, it's hard to believe that Euroskeptic Tories would trust Mr Cameron to lead the Brexit negotiations with the remaining EU leaders having fought against leaving the bloc. Whether transition to a new leadership proves smooth or turbulent remains to be seen. Bearing in mind though that Tory Euroskeptics have made substantial noise and (of course) relied increasingly on “Greek statistics” during the Brexit campaign, it is more likely than not that we will witness substantial political instability, a capital flight from the UK and an economic recession.
We did not need all of this. David Cameron keeps warning British voters against triggering a do-it-yourself (DIY) recession. Nevertheless, if Britain does leave, it is more likely than not that we will end up with a David-it’s-you (DIY) recession.
* Costas Milas is Professor of Finance, University of Liverpool (UK).