international analysis and commentary

A diminished UK leaving a diminished EU


More than a year since the ‘In or Out’ referendum on the EU in the United Kingdom, the ‘fog of Brexit’ has still not settled and no one has a clear plan, least of all the British Government. Far from being fully engaged in negotiations in Brussels, the UK is still negotiating with itself. Theresa May’s vacuous “Brexit means Brexit” and “no running commentary” have been revealed for what they are, no understanding of the consequences of leaving the EU and no plan.

What is becoming clear is the economic fallout of the referendum. Banks are moving staff to the continent, the Pound is reaching parity with the euro, while the overall uncertainty has shaken both investor and consumer confidence.

(Cartoon by Chappatte)


How did we get here?

Britain has never been a fully compliant or a cooperative Member State. It stood aside and watched when the European Coal and Steel Community was established in 1951 and again in 1957, when the European Economic Community and the European Atomic Energy Community were established. The UK only joined in 1973 when it realised that the GDP of the six EEC member states had grown by 95% since the launch of the ECSC, while its own was lagging at 50% growth.

Yet by 1975, Britain was already looking for the exit door. Only 18 months into its membership of the EEC, it had already convened its first ‘In or Out’ referendum. Since then, it has negotiated and obtained rebates, opt-outs, exemptions and privileges for itself and often even for members of its Commonwealth. It never joined the Eurozone nor the Schengen Area.

To be fair, the UK had attempted to join earlier but was blocked by French President De Gaulle. The General twice vetoed UK membership, in 1963 and again in 1967. He feared that the UK would reduce French influence within the grouping and the dominance of the English language. Indeed, as soon as it joined the EEC, the UK started radically reshaping the way the European institutions worked. The French had given the original imprimatur both to the organisation and the spirit of the European institutions. The Commission was essentially a replica of the French administration and the European fonctionnariat thought and acted the way French bureaucrats think and act. The British brought their own political and administrative culture. British diplomats, civil servants and politicians brought or further asserted the values of certain key principles: rule of law; parliamentary sovereignty; personal freedom and presumption against state coercion; fair play; transparency; competitiveness and meritocracy. Their civil servants strictly abided by the three tenets of the British civil service: permanence, neutrality and fair competition. Permanence was intended as long-term commitment and loyalty. Neutrality meant impartiality and readiness to serve governments of any political colour. Competition ensured that entry into the service and promotions was based on an assessment of merit and suitability, firmly barring nepotism and political influence.

While most of those values were already part of the broader European heritage, the British certainly had them applied with more vigour and consistency, gradually changing the way the European institutions work, thereby increasing Britain’s influence – exactly as General De Gaulle had feared. No need to look further than the Single European Act of 1986, that sought the establishment of a Single Market for goods, services, people and capital by 1992. Margaret Thatcher had been instrumental in shaping it. Its free-market values were quintessentially British and suited Britain’s interests. As for the dominance of the English language, with the enlargement in 2004 to ten new Member States, eight of which were former Eastern bloc countries, English became the undisputed lingua franca in Brussels.

Britain had been a fervent advocate of the EU’s Eastern enlargement with a dual objective, to increase the EU’s Single Market and to undermine from within the trend towards further EU integration. The UK was always ill at ease with the EU’s march towards an ‘ever closer Union among the peoples of Europe’. Enlargement was an ideal opportunity to stop it. While it was conceivable to build and manage an ‘ever closer union’ among the peoples of the six original Member States, with compatible Weltanschauung and political vision, it was manifestly much harder if not impossible to bring about further integration among 28 disparate economies, histories and political cultures. No less than 28 European Commissioners in Brussels could hardly share among themselves meaningful portfolios, interpreters and translators were required for 23 official languages, while the European Parliament grew to 751 MEPs (with its official seat shared among three countries, Belgium, France and Luxembourg).

This unwieldy EU was ill-prepared to withstand the two major crises that were about to strike, the global financial crisis of 2007 and the European refugee crisis of 2015. Infighting among EU member states over Greek bailouts or ‘refugee quotas’ was unsightly and dispiriting. Numerous populist political leaders seized their chance, from Viktor Orban in Hungary and Jaroslaw Kaczynski in Poland, to Beppe Grillo in Italy and Alexis Tsipras in Greece. Britain had Nigel Farage.

The two concomitant crises empowered the Eurosceptic Tories. In the hope of stopping the rebellion, the then Prime Minister David Cameron convened the ‘In or Out’ referendum which he then proceeded to lose. No undisputed Tory leader was left standing. Theresa May emerged as the least bad candidate and took possession of 10 Downing Street. She then entrenched herself there, guarded by an inner group of advisers that did not see the need to consult with Ministers, Parliament or the civil service. This allowed the PM to impose her vision of Brexit and trigger Article 50 of the EU Treaty, thereby putting the nation in a position where it has no plan or strategy for Brexit, while the ‘clock is ticking’.

Yet Britain’s position may be better than it seems. The EU cannot afford a ‘cliff edge Brexit’ just as much as Britain cannot. Britain’s economy is too large, its GDP represents more than a sixth of the EU’s total, while its population is more than a seventh of the EU’s total. Britain’s contribution to European defence, security and intelligence is greater than that of any of its peers, it is a nuclear power and one of the two EU members of the UN Security Council. The negotiators in Brussels can rest assured that no matter how disorganised at present, Britain will know how to bring its weight to bear in the negotiations.

There will be losses on both sides

By leaving, Britain will sacrifice its influence within the EU and on the global stage. From being part of the EU decision-making process, it will become a rule-taker. It will have to forge a role for itself as a medium-sized nation. The price that Britain will have to pay for ‘regaining control’ will be a significantly diminished role on the global stage. That may well entail a weaker economy, an even weaker Pound, slower growth and in general a poorer Britain.

The EU without Britain will not only be diminished in size, but more significantly, it will be deprived of British influence from within. Over 40 years of membership, Britain put itself firmly at the heart of EU decision-making. In the six years leading up to the EU referendum, Britain was on the winning side in almost 90% of votes within the EU Council of Ministers. Given Britain’s ability to build and lead voting alliances, in most of those votes, Britain was the initiator rather than a follower and the outcomes suited UK’s best interests. With Britain’s departure, many Member States will lose a natural leader and consensus-builder. According to a study by Simon Hix of the London School of Economics, based on data by Daniel Naurin who conducted 869 interviews of EU officials between 2006 and 2012, in that period Britain was the undisputed leader among EU Member States in connecting with officials from other Member States and influencing their voting. British officials are at the very heart of EU policy-making especially during negotiations behind the scenes, much more so than Germans or French. Britain is the country that most other countries look up to when deciding how to vote. This is because they accept Britain’s leadership in protecting the core values of rule of law, fairness, free markets and personal freedoms. Here, then, lies the true damage of Brexit: the EU will lose the natural champion of those core values that Britain has successfully engrained into the inner workings of the EU.

The irony is that it is precisely the violation of those core values by Theresa May’s government at home that is leading to an ill thought-through Brexit. The ‘Leave’ campaign won, by a narrow margin, by running a mendacious campaign, while Article 50 was wantonly triggered, without a proper understanding of the consequences, nor a clear plan or strategy. MPs voted in support of Theresa May’s Bill to trigger Article 50 against their better judgement in an atmosphere of fear. In short, the values of truth, transparency and sovereignty of Parliament were all breached. After Article 50 was triggered, Theresa May called a snap election from which she may never recover. The election left her weak, discredited and – paradoxically – without legitimacy to deliver “her” Brexit.

It is now up to the savvy and respected British diplomats and officials to negotiate a least damaging Brexit.  Or, as John F. Kennedy Jr. would have said, Brexit is too important to be left to politicians.