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After Brexit, Fractured EU Faces New Challenges

Posted by hkarner - 16. Dezember 2019

Date: 15‑12‑2019

Source: The Wall Street Journal

Britain’s departure from the EU has unified the other members of the bloc, but life beyond Brexit promises to expose divisions among them

BRUSSELS—Boris Johnson’s general election victory, and the likely departure of Britain from the European Union next month, will bring relief to most European governments: Now they can focus on other pressing issues facing the bloc.

Yet Brexit was a rare point of unity for the remaining 27 members and life beyond it could expose divisions among them. It isn’t clear, for example, how cohesive those left in the bloc can be as they confront issues after Britain’s departure—including negotiating new trade relations with the U.K.

During divorce talks, the bloc’s shared interests enabled its members to speak unanimously on matters such as winning protections for EU citizens in Britain. Determining priorities in coming talks with its former member, from such issues as access to each other’s markets and the rights of European fleets to fish in British waters, will likely prove harder.

Those negotiations will present difficult trade‑offs because both sides say they want close economic ties but have conflicting agendas. Prime Minister Johnson has said he wants to win Britain the freedom to diverge from EU rules and standards, giving him flexibility to reach trade deals around the world. The EU wants to keep the two economies more aligned.

EU leaders have already said a less‑regulated U.K. could pose a competitive threat in coming years. That means they will insist that the U.K. broadly conforms to EU environmental, labor and other standards as the price for a close trading relationship.

“If Boris Johnson wants a very ambitious trade deal, there has to be very ambitious regulatory convergence. Be my guest,” said French President Emmanuel Macron on Friday.

His counterparts and other senior EU officials have said for months they want Brexit resolved so the bloc can focus on the future. But since October, when a preliminary Brexit deal that now looks likely to win British backing was clinched, the European mood has darkened.

Relations have soured between France and Germany, whose alignment had driven much of Europe’s integration over the past seven decades.

Mr. Macron has divided the bloc with criticisms of the North Atlantic Treaty Organization, an attempted rapprochement with Moscow and a recent veto on enlarging the EU to incorporate countries in the Balkans.

German Chancellor Angela Merkel, whose government’s inaction in the face of political infighting at home has frustrated other leaders, has worried aloud about Britain—currently the bloc’s second largest economy—emerging as a new rival to the EU.

Now, as EU countries begin fractious debates over the bloc’s next multiyear budget, many governments are internally divided or unable to sustain parliamentary majorities, further complicating efforts to maintain unity.

For sure, the EU no longer feels the threat to its existence of 2016, when nationalist forces were ascendant in Europe. Now, a growing concern is that the EU’s decision‑making machinery—always cumbersome—is no longer able to build consensus on even smaller issues.

There is a fear of sclerosis as Russia, China and the U.S. pose unprecedented economic and political challenges to the EU, which is now weakened by the U.K.’s likely departure.

The EU has traditionally exercised soft power, based largely on using economic incentives to promote democratic values. That flourished in a globalized world with widely accepted rules and an ethos that compromise could prove mutually beneficial. Now Europe appears adrift in the new reality of big‑power politics. Even internally, the EU’s liberal democratic values are openly attacked by governments in Hungary and Poland.

“The fundamental reasons why there haven’t been any big reform pushes recently aren’t to do with Brexit,” said Pepijn Bergsen, a research fellow at Chatham House, a London‑based think tank, and a former Dutch official. “It’s to do with fundamental disagreements among the member states on how to move forward.”

The bloc faces deep divisions over many of its big strategic challenges. A durable solution to the bloc’s migration rules remains elusive after four years of arguments. The problem encompasses both people arriving from unstable regions outside the EU and how to distribute them inside the bloc.

Separately, Mr. Macron has proposed fixing flaws in the euro’s structure by deepening economic and budget integration, but the proposal has barely advanced. Tempestuous relations with the U.S. under the Trump administration have sown doubt over the future of Europe’s American security umbrella. EU member states are at odds over how to deal with Beijing’s twin goals of economic cooperation and geopolitical influence.

The EU will feel the loss of Britain, which bolstered the bloc even while impeding other countries’ initiatives. For years, Britain opposed deeper European integration in areas including defense, objected to a hefty EU budget and was wary of common financial and labor regulations. Still, its security muscle lent the EU some heft in foreign policy and London’s close ties with Washington helped bridge the Atlantic.

The U.K. was a strong proponent of free‑trade, EU enlargement and pragmatic cooperation to tackle security threats. It opposed a “fortress Europe” approach, pushing for a competitive and open economy.

Britain also became in recent years the EU’s second‑biggest net funder. EU officials say the U.K.’s departure will leave an estimated €84 billion ($93 billion) hole in the bloc’s next seven‑year budget.

Agreeing on the size and makeup of that €1 trillion‑plus budget will be the first major post‑Brexit fight. Efforts to cut the amount of money spent on the EU’s newer members in Central and Eastern Europe risk further embittering the bloc’s east‑west relations, already scarred by fights over migration and democratic norms.

EU officials meanwhile are scrambling to assuage worries in the richest member states, such as Germany and the Netherlands, that their already hefty budget bills won’t soar to fill the British gap at a time when euroskeptic forces in both countries are rising again. Months of talks on this, which continued among EU leaders at a dinner Thursday evening, have so far gone nowhere.

Perhaps most worrying of late is the fading of a shared vision of the EU’s future in Berlin and Paris.

German officials were furious when Mr. Macron vetoed the start of EU enlargement talks with North Macedonia in October. French frustration with the slow pace of eurozone reform and the modest size of a new eurozone budget has been building for several years. Ms. Merkel warned Europe was unable to defend itself without NATO after Mr. Macron raised questions about the alliance’s future.

The Franco‑German relationship is stuttering, rather than broken. The duo are pushing a revamp of the EU’s industrial policy, a strategic priority meant in part to address the challenges posed by China’s economic muscle. Berlin and Paris recently brokered a delicate compromise on the EU’s 2020 budget. Yet their common leadership, which led to the removal of borders across the continent and launch of the common currency, appears beyond reach.

To be sure, the bloc has gone through endless ups and downs in its more than 60‑year history.

A new leadership team has taken office in Brussels, with sights fixed on rebuilding the EU’s cohesion and positioning the bloc as a more effective geopolitical player in an increasingly volatile world.

The EU’s single market—a common zone of harmonized economic regulation that speeds trade among member countries—remains a powerful asset that its members won’t want undermined by any trade deal with Britain. In recent years, Brussels has focused its energy on important challenges—from inking trade deals with countries such as Japan and Canada to expanding its single market into the digital economy and energy.

Still, some of Europe’s leaders warn the bloc will only be safe if its members further tighten their mutual ties. “We are in a world of powers,” Mr. Macron said in October. “We need to strengthen integration.”

 

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