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Trade war, no-deal Brexit could push EU into recession - EBRD official

Trade war, no-deal Brexit could push EU into recession - EBRD official
FILE PHOTO: A staff member sets up EU flags ahead of a European Union leaders summit after European Parliament elections to discuss who should run the EU executive for the next five years, in Brussels, Belgium May 28, 2019. REUTERS/Piroschka Van de Wouw -
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LJUBLJANA (Reuters) – A no-deal Brexit or a trade conflict with the United States could push the European Union into recession, Jurgen Rigterink, First Vice President of the European Bank for Reconstruction and Development (EBRD), said on Thursday.

“Right now everybody is talking about U.S.-China relations but even if that is solved, it could very well be that the next discussion could be between the U.S. and Europe,” Rigterink told Reuters on the sidelines of a political and business summit in Slovenia.

“If that’s the case, then obviously this could have a large impact on the EU, on Europe, not only on the car sector but on many other sectors as well.”

He said no one knew what the chances of Britain leaving the European Union without a deal were, but with relatively sluggish growth in most European economies, a so-called hard Brexit could tip the bloc into slowdown.

“Even a recession is possible. It might be one possible trigger, there might be many more which we do not foresee at this time.”

He added that economic fundamentals in Europe were much stronger than a decade ago and that the banking system was much more resilient.

(Reporting By Marja Novak; Editing by Kirsten Donovan)

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