Investment experts at Atlanta-based money manager Invesco Ltd. didn’t see much upside in Britain’s exit from the European Union.
“I don’t see any positives in it at all,” said Bernhard Langer, formerly Invesco’s chief investment officer in Germany and now head of its Quantitative Strategies unit. The formerly London-based Invesco manages $791 billion in investments.
Friday's results of the so-called "Brexit" referendum on Thursday showed that 52 percent of the United Kingdom's voters favored the nation's exit from the EU, shocking many in the investment world.
The 28-nation European Union was aimed at stitching the continent’s often-warring nations into a borderless common market similar to the United States. But it has been hobbled by squabbling over costly bureaucracy at its Brussels headquarters, sovereignty issues and the wide economic disparities among its member nations.
Critics also charge that the euro, the currency used by 18 of the EU nations (but not Britain) has hamstrung several nations’ ability to stimulate their struggling economies.
Langer, speaking Thursday at an investor meeting in Invesco’s swank headquarters in Midtown Atlanta, said the vote in Britain was part of a revolt against top political and economic leaders that is sweeping many nations, including the United States.
“We have an anti-establishment movement around the globe everywhere,” said Langer. He noted that far left- or right-wing groups have gained support at the expense of mainstream parties in France, Italy, Spain, Denmark, Sweden, Greece, the United Kingdom and the United States.
“There is a big risk that tomorrow morning we may need a new prime minister in the U.K.,” said Lander.
He turned out to be right. British Prime Minister David Cameron, who had championed the U.K.’s staying in the union, said Friday that he will step down in the wake of the Brexit vote.
The U.K.’s exit could lead to “contagion” in Europe, said Arnab Das, Invesco’s head of research for emerging markets.
Das predicted that other nations could also demand votes on whether to stay in the European Union. The EU could “unravel,” he said.
But the shock of Britain’s exit could instead cause the remaining nations to consolidate more power in the EU to fix its shortcomings, he added.
“The problem with the euro zone is its money is the only thing that’s federalized,” he said.
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