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Why Europe Shouldn’t Be Complacent About Brexit

Posted by hkarner - 16. September 2016

Date: 16-09-2016
Source: The Wall Street Journal

Britain’s plan to leave is only one recent blow to the bloc, but not one it can afford to ignore

bratislavaEuropean leaders posed Thursday at Bratislava Castle in the Slovak capital on the eve of a European Union summit to which Britain isn’t invited.

The reaction of the European Union’s 27 other member states to Britain’s vote to leave has so far been more muted than many people, including Britons, expected. That isn’t likely to change much after a summit of the 27 in Slovakia on Friday.

In his 6,000-word set-piece speech this week, European Commission President Jean-Claude Juncker didn’t spend much time talking about the June referendum vote. “We respect and regret the U.K. decision, but the EU as such is not at risk,” Mr. Juncker said.

There are good reasons for the subdued response. From the perspective of the 27, the referendum vote was a pity, but it is the British who have most to lose.

The EU is far more important economically to the U.K. than the other way around. That is true collectively and for individual countries: only Ireland and Cyprus send more than 10% of their exports to the U.K.
Apart from some tweaking of EU law to take account of the departed British, the adjustment for the rest of the bloc will be modest. The British, on the other hand, face a complete overhaul of legislation to expunge the EU from their laws, a task that could occupy government for a decade. Also ahead are torturous talks over the country’s new trading relationships around the world.

Negotiations over the divorce terms from the EU haven’t started yet and it isn’t clear what the U.K. will seek from a future relationship. So there is no point in the 27 getting too prescriptive.

Another reason is that for the 27, Brexit is just the latest, and not necessarily the most damaging, blow to the union. A crisis over migration and the sluggish recovery of the eurozone from the financial crash have coarsened politics all over Europe.

Leaders in Germany, France and the Netherlands will have to face down populist parties in national elections next year. Italy and Spain are also absorbed with national politics. “The 27, broadly speaking and with some exceptions, are poorly led,” said Andrew Duff, a former member of the European Parliament and an EU constitutional expert.

The modest expectations for the Bratislava summit, to which U.K. Prime Minister Theresa May isn’t invited, also reflect how little agreement among there is member states on how to react. For most, pushing more economic integration as a post-Brexit priority just wouldn’t sell with voters at home.

Moreover, as a potential symbol of a broader political malaise, Brexit present a less tangible challenge for the EU than it does for the U.K.

British politicians haven’t been shy in advising their European counterparts that the vote could be a harbinger. “The voices of discontent reach far beyond the English Channel,” said Syed Kamall, a British Conservative member of the European Parliament, in response to Mr. Juncker’s speech Wednesday. “In many other EU countries, the warning signals are there. And if they continue to be ignored, don’t be surprised if others ask to follow.”

But it isn’t just the British. Donald Tusk, the European Council president who will preside over the Bratislava summit, said broader lessons should be drawn.

“It would be a fatal error to assume that the negative result in the U.K. referendum represents a specifically British issue,” he said. “Today many people, not only in the U.K., think that being part of the European Union stands in the way of stability and security.”

EU governments needed to respond by better controlling the bloc’s external borders and cooperating to fight terrorism, he said.

For some, Mr. Tusk’s response is unsatisfactory. “His response to everything is Fortress Europe,” said Mr. Duff.

Mr. Duff believes Brexit’s strategic dimension is in danger of being overlooked. The decision has important consequences for the rest of the world, and if that isn’t recognized in Europe then it surely is in Beijing, Washington and Moscow, where “the authority of the EU is depleted.”

He fears the EU’s post-Brexit debate will be dominated by minutiae like the EU budget. It is true that the U.K.’s departure will deprive the EU of its second-largest net contributor. But even if London pays in nothing after leaving—and some continued contribution is likely—the budget will shrink by about €10 billion annually ($11.2 billion), less than a thousandth of the gross domestic product of the EU without the U.K.

What is needed is a new treaty between the EU and the U.K., in which the EU identifies Britain as a strategic partner, Mr. Duff said. This should be preceded by a “calm and systematic discussion” that strengthens the Atlantic alliance. If the U.K. makes clear its wish for such a relationship before embarking on divorce, it could provide a positive context for the negotiations, he said. More than that, the future security of the West may depend on it.

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