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Brexit: Europe at a strategic crossroads?

Just under a fortnight ago, on 24th June, Britons shocked the world in voting in a long-sought-after referendum to leave the European Union (EU). The day after – once the news broke – many commentators went into overdrive, condemning ‘Brexit’ as the biggest event in Europe since the end of the Soviet Union or the largest geopolitical catastrophe since the Second World War. This is no-doubt due to the sheer number of analysts – British and otherwise – who have invested much of their lives into the project of European integration: there is a genuine fear that ‘Brexit’ is the beginning of the end of the entire European programme, and, consequently, resentment towards the UK is stronger than ever. Resentment runs high too in Britain, so much so that many in the ‘Remain’ campaign are finding it difficult to digest the outcome – and are eyeing the possibility of some sort of legal or political challenge.

Yet, although the British decision to quit the EU is profound, will it really lead to the calamities predicted? Was it driven by simple or base desires? And can it really be undone? This ‘Standpoint’ aims to provide some answers to these questions and from a relatively neutral perspective: while both authors supported the UK remaining inside the EU, they also believe that ‘Brexit’ will be less damaging to the UK (and EU) than many think – or hope. As the United States (US) President, Barack Obama, has argued, it is time for the ‘hysteria’ to subside and for more sober analysis.

1. ‘Brexit’ was about immigration

Not exclusively. Many of the less educated and well-off parts of the British electorate did indeed vote to leave the EU because they feared a future influx of migrants. However, an important distinction must be made between the masses and the intellectual leaders of the ‘Vote Leave’ campaign. The intellectual rationale for ‘Brexit’ is much deeper than merely immigration. The leaders of the ‘Brexiteers’ see profound differences between British and European civilisation, which they do not believe can be overcome. For them, the EU is a failed attempt to reorder space and time within and around the European mainland along supranational lines – a theme that challenges Britain’s historical mission to prevent the emergence of a European ‘superstate’, and uphold a balance of liberal power on the continent. This imagined EU hegemon is frequently mixed up with references to German influence, to the extent that the two become coterminous. Undoubtedly, some of these Eurosceptic ideas can be seen as far-fetched, not least considering how uncomfortable Berlin supposedly is with the notion of EU leadership, let alone hegemony! However, such themes continue to enjoy considerable purchase amongst Britain’s political and strategic elite. Indeed, a concern with German preponderance goes way beyond the more simple Eurosceptics and ‘Brexiteers’: it reaches the highest levels of the British government. For example, only recently, the UK Ministry of Defence – in a clear allusion to Germany – warned:

If a European country financially outperformed the rest of the EU to a significant extent, domestic political concerns could prompt the country’s leaders to use its leverage to dominate Europe not only economically but also politically, severely challenging the EU’s cohesion. In such a situation, Europe could split between those countries who are dependent on the large power and those who resent its influence. There is a risk that NATO could become less effective, as European countries may place loyalty or opposition to the economic power above any other alliances.

Such concerns have also been stoked by the British Prime Minister, David Cameron, who has contraposed his vision of the EU as a ‘flexible and dynamic network’ with the ‘rigidity of a bloc’. The idea of Europe as a ‘flexible and dynamic network’ is one that respects the UK’s historical mission in Europe, i.e. standing up for diversity and the preservation of a regional balance of power. That of a ‘rigid bloc’ evokes notions such as hierarchy, homogeneity or unaccountability, all of which are (rightly or wrongly) often associated in Britain with the idea of a European ‘superstate’ or a ‘German Europe’. This echoes a longstanding debate in Britain about whether the EU works in favour of the regional balance of power, respecting national differences and plurality, and guaranteeing the sovereignty and independence of its Member States, or rather whether it works against it, by amplifying the power of the strong over the weak, and by acting as a transmission belt for the leadership of one country, namely Germany. Contrary to conventional wisdom, this is not a ‘nineteenth century’ concern. It also dovetails with Margaret Thatcher’s warning that ‘the [European] Community augments German power rather than containing it’.

The image of a strong Europe, whether in the form of an ‘unaccountable supranational bureaucracy’ or that of German dominance through an EU institutional proxy – however far-fetched and unrelated these two might be – evoke a well-anchored narrative and imaginary about illiberal threats coming from the continent among certain British elites. This is perceived as the utter antithesis of the UK approach, which is instead predicated on the development of strong, liberal, democratic and civic nation states, cooperating loosely where they share common interests. Consequently, the leaders of the ‘Vote Leave’ faction have always seen a supranational or ‘Germanic’ EU not only as a threat to their own country’s approach, but also its very existence. The bottom line is that to secure ‘Brexit’, the leading ‘Brexiteers’ slyly adapted their political message to appeal to the masses’ frustrations in relation to immigration. The leading ‘Brexiteers’ are not themselves particularly concerned about migration – and even support it for economic purposes – but merely fanned the masses’ frustrations as a means to an end, and won.

2. ‘Brexit’ can be ‘undone’

Certainly – if (direct) democracy is to be overlooked. If the ‘Remain’ campaign is to be believed, many ‘Brexiteers’ are alleged to now have ‘buyer’s remorse’, questioning whether their decision has permanently damaged Britain’s economic fortunes, its tolerance, its political reputation or even its continuity as a unified country. Various senior representatives from the ‘Remain’ camp have also put forward the idea of ignoring the vote, either by holding a second referendum – such as the Republic of Ireland held between the crafting of the Constitutional Treaty and the Treaty of Lisbon – or that the Houses of Parliament could simply overlook the vote, insofar as it is not legally binding on the government. This could be achieved either through a vote by Members of Parliament, who must repeal the European Communities Act for ‘Brexit’ to finally occur, or during the increasingly inevitable prospect, given the winding-up of Jeremy Corbyn’s reign over the Labour Party, of a new general election in the autumn. One or more of the mainstream political parties may simply promise to overlook the referendum should it be elected to power.

While not impossible, these kinds of ‘fixes’ are unlikely to work. Any incoming Prime Minister who advocated them, particularly from the Conservative Party, would likely face political destruction before he or she even got off the ground. The argument would no longer be about the EU, but about democracy, and any nuanced attempts to insist on the ‘parliamentary’ or ‘constitutional’ nature of democracy – in opposition to ‘direct’ democracy – would in all likelihood get lost along the way for most people. The damage could be serious, and populism would get a shot in the arm. Thus, any attempt of a ‘fix’ is more likely to succeed if the ‘Brexit’ premise is respected. Rather than trying to overcome the outcome, the UK ought to draw Brussels close and take part in as many EU policy initiatives and domains as possible, while not actually being a formal participant in European integration.

Here, the elephant in the room is of course the Single Market, which is in the interest of both the UK and the EU. The German Chancellor, Angela Merkel, has already said that it is not possible to be open to goods and not to people. In principle, she is self-evidently right about that. But EU leaders will also have to recognise that some changes may be needed if they are to keep the UK as close as possible, to restore the EU’s reputation in other countries, and even prevent London from becoming hostile. Indeed, one way to protect the principle of freedom of movement might be to set caps on non-EU migrants for all EU countries, and not just for the UK. Beyond the Single Market, EU leaders would do well to maintain as close a relationship as possible with London on other policy areas, such as energy policy, research, police cooperation and foreign and defence policy. In other words, the UK would move from having one foot in and one foot out to having one foot out and one foot in. This could be a win-win for all: Brussels would keep the UK on side, while the UK would retain access to the world’s largest single market.

3. ‘Brexit’ consigns the UK to history’s ash heap

Hardly. Scotland clearly voted to remain in the EU and, consequently, Nicola Sturgeon – leader of Scotland’s separatists – has stated that she may seek another referendum. However, while the prospect of Scottish separation from the UK is a possibility in light of the new circumstances, which would effectively terminate the UK as a geopolitical entity, it is far from a foregone conclusion. After all, 64% of Scotland’s trade is with England, Wales and Northern Ireland, and social and political bonds have continued to grow between the component parts of the UK for over three centuries, while only 15% of Scottish trade is with the rest of the EU. If Scotland’s separatists thought it folly for the UK to leave the EU when only 44% of British exports go to the rest of the EU, how can it be rational for them to advocate Scotland leaving the UK when nearly 65% of its trade is with the UK? Once emotions subside, this will be an impossibly difficult question for Ms. Sturgeon and her ilk to answer. Add to this the prospect that Scotland would not automatically achieve EU membership, would be forced to adopt the Euro and may be required to establish a hard border with the remainder of the UK, and the Scots may again waiver – as they did in 2014 with a substantial majority – that separation from the UK in exchange for accession into the EU would not be in their best interests.

To be sure, the UK will undoubtedly be shaken by the economic readjustments required to cope with ‘Brexit’ (and/or Scotland’s separation, perhaps more), although to what degree in the longer term depends on multiple factors. If the UK is able to negotiate continued access to the EU Single Market, the prospects for the British economy will grow considerably. To start with, the EU has continued to decline as a market for British goods since a high-point of 55% in the early 2000s, and the long-term projections suggest a continued decline as the highly globalised UK economy capitalises on economic growth in North America and the Indo-Pacific. Meanwhile, the vast majority of the EU’s Member States – not least Germany – have positive trade balances with the UK, which they will almost certainly be keen to protect. Moreover, London will likely remain a leading global financial centre, even if it loses its crown as ‘Financial Capital of the World’ to New York City, to Tokyo or, in the future, to Shanghai. Given London’s huge lead – which is not only due to its access to the Single Market, but a plethora of other factors – no European city will ever be able to compete: almost as many people work in finance in London as actually live in Frankfurt.

Militarily, while the economic disruptions of ‘Brexit’ may have a detrimental impact on the British Armed Forces, and particularly the spending assumptions behind the 2015 Strategic Defence and Security Review, it is far from certain that they will hamper UK military power relative to other European countries. Short of some stellar effort from Paris or Berlin to rebuild their military might, and even if the British defence budget were reduced by 10% over the next ten years – almost triple the worst case projections for the shrinkage of the British economy – it would still be, based on current calculations, the second-largest in NATO, and by some margin. Moreover, military spending is a political issue: additional resources may be found to actually boost British defence spending both relatively and absolutely, particularly if the next Prime Minister understands how the armed forces could be utilised to secure favourable trade relationships, and not only with the EU. Those EU Member States most exposed to Russian pressure in the east and to cross-sector threats in the south may be more amenable to British requests if the UK strategic commitment to their own security is enhanced. Equally, countries in the Indo-Pacific may also look favourably on UK commercial proposals if London maintains and even bolsters its growing commitments East of Suez, where new partnerships and linkages have already been forged with Japan, South Korea, India and the countries of the Five Power Defence Arrangements and where new naval bases and air stations have been opened in the Gulf States, not least to augment US power as Washington seeks to meet China’s rise.

It is for these reasons that the US – London’s closest ally – is unlikely to jettison its special relationship with the UK anytime soon. Senior American politicians are already calling for a US-UK trade deal, despite Mr. Obama’s previous threat to push London to the ‘back of the queue’, and US strategists have welcomed the prospect of enhanced British input into NATO. The UK will also remain central to the Five Eyes intelligence network and to other US allies via the Commonwealth. Indeed, US-UK – and Anglosphere – relations may grow even closer if the Royal Navy is forced to move its nuclear weapons to the US while a new base is found in case of Scottish separation and as the UK focuses more on political and economic issues East of Suez. As the fulcrum of global economic and geopolitical gravity shifts away from Europe, the EU would also do well to remember that the UK’s comprehensive global footprint means it is ideally placed to safeguard European interests in the extra-European world and in ways where most EU Member States – France somewhat excluded – are likely to continue to have little sway.

So, if Scotland does not separate, and if London finds ways of mobilising its military resources to the benefit of its economic needs, the UK may weather the ‘Brexit’ storm and continue to gain in power relative to other European countries, even overtaking Germany both economically and demographically. And even if the UK broke apart, England – the core of the UK – would remain a very robust country, with a population of around 60-65 million people by 2030, meaning it would be easily be equal to France or Germany.

4. ‘Brexit’ will enable further EU integration

Hang on, not so fast! Far from the prospect of rapid and deeper European integration in light of ‘Brexit’, the UK’s withdrawal – especially if it is acrimonious – could actually destabilise the balance of power within the EU, as well as its political dynamic and functioning. Aside from the fact that the EU has lost its leading and strongest advocate for the two most successful EU policies – Enlargement and the Single Market – ‘Brexit’ will have serious implications for the position and perception of the French-German ‘motor’ within the union and for the Berlin-Paris relationship itself.

Most medium and small Member States see the UK as a source of fresh air within the EU, insofar as London provides a much-needed balance and counter-weight against any potential attempts by Berlin and Paris to pull Brussels’ strings in a  bilateral context. Secondly, and perhaps more importantly, London provides balance to the French-German relationship itself. That France and Germany disagree on economic policy is no open secret. Reports about the German Finance Minister, Wolfgang Schäuble, having concerns regarding France and Italy potentially pushing for a greater pooling of liabilities in the Eurozone are illustrative of how ‘Brexit’ could lead to an exacerbation of intra-European differences and animosity.

When it comes to foreign and defence policy, the picture is no less rosy. Without London’s resolve, the EU’s policy in relation to Russia’s geopolitical revisionism in Eastern Europe is likely to falter. Meanwhile the idea, popular among some Europeans, that the UK’s longstanding opposition is exclusively responsible for the misfortunes of the Common Security and Defence Policy (CSDP) is not far from lunacy. For one thing, London has done more than any other European capital to press for enhanced military spending (albeit through NATO), not only in relation to the percentage of national output, but also in relation to spending on the acquisition of new military capabilities. Moreover, without the UK, while the remaining EU Member States may come to agree on a strengthened CSDP, enormous disagreements are likely to remain in relation to the EU’s military posture. The Libya and Syria crises, where France sided with the UK against Germany, is the latest in a series of examples. Ultimately, Germany’s cautious approach to foreign policy and desire to build the EU’s international profile around economic power, multilateralism and civilian or normative power, contrasts with France’s emphasis on military power and a pro-active foreign policy.

Finally the UK, in thrusting its full strength behind a reinvigorated NATO – not least to prove its European credentials and to shore up European resolve towards Russian revanchism in light of Britain’s withdrawal – may also be able to further frustrate the EU’s already problematic CSDP agenda. This approach could be further augmented by the UK building on its multilateral and bilateral European arrangements, such as the British-French Alliance, the Northern Group and enhanced relations with Norway, Denmark, the Netherlands, the Baltic States and Poland. In short, the UK – no-doubt backed by the US – will continue to offer powerful incentives to frustrate EU efforts in areas it finds potentially harmful, either to its own interests, to European security, or to NATO.

Conclusion

The authors understand that many of the arguments and claims made in this ‘Standpoint’ are ultimately open to interpretation and contingent political developments that are frankly unforeseeable from the current vantage point. However, they believe that ‘Brexit’ will open up all kinds of possibilities, and that – contrary to the fantasies of those who have long seen the UK as a blockage to deeper European integration – it will not necessarily deliver a more integrated EU, but may actually entrench centrifugal tendencies. It is therefore in the interest of both the UK and the EU – and European security more generally – to ensure that a close and mutually beneficial relationship between London and Brussels results from ‘Brexit’, and that power is balanced to the benefit of both. With ‘Brexit’, Europe truly is now at a strategic crossroads: but the most important point is that its consequences are not preordained; the future will be predicated on the political and strategic decisions – insightful or otherwise – taken in London and Brussels over the next few months.

Vol. 8, No. 17 (2016)


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