January 24, 2019 / 2:14 PM / 5 months ago

ECB's Draghi says Brexit risks rooted in knock-on effects

FRANKFURT, Jan 24 (Reuters) - Uncertainty over how Brexit will pan out, and notably its knock-on effects, are a major factor behind a downgrade of the European Central Bank’s view on economic risk, ECB President Mario Draghi said on Thursday.

“If you compare potential disruption coming from Brexit for the aggregate of the euro zone ... it doesn’t seem to be extensive,” he told a news conference after the ECB downgraded its growth risk assessment.

“But we have to take into account items like value chains (and that) ... some countries are more exposed to events in the Brexit case.”

Facing its deepest political crisis since World War Two, Britain is due to leave the European Union on March 29 but has no approved deal on how the divorce will take place.

Prime Minister Theresa May is battling to break the deadlock after last week’s crushing parliamentary defeat of the withdrawal agreement she negotiated with Brussels raised the prospect of a disorderly Brexit with no deal. (Reporting by Balazs Koranyi; Writing by John Stonestreet; Editing by Catherine Evans)

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