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Ifo Institute favors Switzerland-plus solution for Britain

This is the opinion published by German think-tank Ifo Institute:

The Ifo Institute has called on the EU to offer Britain a solution modeled on Switzerland. "In view of the deadlocked situation, new approaches are needed," notes Gabriel Felbermayr, Director of the ifo Center for Internation Ifo Economics. "With the Swiss model, Britain would leave the political union, but would still be able to cooperate closely with the EU in as many policy areas as possible via a multitude of bilateral agreements. A central anchor point should be the UK's continued membership of the European Customs Union, with the UK still having a say in trade policy decisions. We consider this to be a viable and face-saving path. This proposal has the added and obvious advantage that it also represents a solution for Turkey and other countries on the periphery of Europe,” explains Felbermayr.

As a large marketplace, the EU provides added value for both its members and other participants, so enlarging this marketplace is in the interest of all parties. "The four fundamental freedoms, including the freedom of movement of persons criticised by many in Britain, are merely political principles that are not grounded in economic theory," says Martin Braml, co-author of the discussion paper. "Both free trade (free movement of goods and services) and factor mobility (free movement of persons and capital) are each sufficient arguments for market efficiency and are by no means mutually dependent", adds Braml.

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