Brexit: lessons for the future

Britain has decided to leave. I am sad, slightly shocked and worried. This is a huge blow to European integration, probably the biggest setback in 60 years of European project. I would like to write about the causes of this result, but also its consequences and the lessons we can learn from it.

Let’s be clear: the European Union is a positive project with plenty of benefits, but it is also is an imperfect construction full of mistakes which still needs reform. Among its problems, it faces a democratic deficit and an excessively liberal structure which privileges financial interests over citizens’ concerns. As such, we cannot remain uncritical about this EU; more and more people are asking the correct questions but unfortunately, many are not giving the rights answers. Brexit is probably the worst one so far.

Yes, the EU has its part of responsibility. But do not fool yourself, the results of the referendum have little to do with a rational criticism of the EU and its policies. There are the consequence of two factors which have been visible in the last years. Firstly, the rise of the nationalist, xenophobic and reactionary far-right which disguises its true ideology behind a well-calculated Euroscepticism. Secondly, the passivity of national governments, which have desisted in their defence of EU and even worse, allowed it to be used as a scapegoat to avoid responsibilities for policies taken at home. This is especially true in the UK, paradoxically the less integrated country of the EU. It is undeniable that David Cameron was comfortable with the social anger targeting the EU instead of the British government and that he even encouraged this attitude.

The referendum itself was not a mistake, but there was no need of convoking it. As The Economist writes, “Back in 2013, the public opinion was not clamouring for it”. It was a short-term gamble to silence noisy Eurosceptic backbenchers and to maintain the unity of the Conservative party. It was an irresponsible electoral move thought on party terms, not national. Three years later, the country experiences its worse political instability ever and David Cameron resigns with leaves a disastrous legacy.

The campaign and the results

Then came the campaign. The ‘Remain’ side was poorly led. David Cameron was overconfident in his convincing capacities and he wrongly thought that his February deal with the EU would suffice to convince undecided voters. He is not an Europeist and he was uncomfortable defending a position which was unnatural to him. He campaigned for the EU because he knew that the alternative was worse. In consequence, the arguments were more about the catastrophic consequences of leaving than about the positive effects of remaining. Thus, the ‘Remain’ campaign had absolutely no capacity of illusion: it relied too much on the politics of fear. Jeremy Corbyn was not very active in the ‘Remain’ campaign either, but he is not to blame: the ‘in or out’ debate was nothing but a civil war within the Conservative Party which spread to national and European politics. No wonder that he did not want to be stuck in it. On the other hand, the ‘Leave’ campaign was even worse. It was full of lies and contradictions. The Brexiteers, especially Nigel Farage, dragged the debate into the recurrent topic of immigration, until it became the core of the campaign, eclipsing all other considerations. As Owen Jones wrote, the campaign focused on immigration as if “migrants and people fleeing violence and poverty were the cause of the multiple problems afflicting European society, from the lack of secure jobs and houses to stagnating living standards to public services ravaged by cuts”. Unfortunately, this xenophobic and nationalist campaign won. Traditionally working classes worried about immigration, ended up voting ‘Leave’, proving that nothing had been done to counteract the dominant and false argument on immigration.

The results are worrying in many ways. Look at the politicians who have celebrated the outcome of the referendum: Marine le Pen, Nigel Farage, Geert Wilders, Matteo Savini and so on. It is a victory for scaremongers, bigots and xenophobes. Furthermore, the statistics of the referendum project the image of a truly ‘Broken Britain’ (how ironic…) with four major cleavages. First, an impressive generational one. Second, a cleavage between nations. Third, one between educated and less educated people. Fourth, one between well-off and less well-off people. It would be easy to blame the uneducated poor for this result, but the causes are far more profound. Look for the reasons in the rising inequalities provoked by liberal and austerity policies, which have left many people impoverished, disenchanted with politics and felt abandoned by a political class which does not look for their interests.  

european stars

Europe is crying

The consequences for the UK

The list of consequences is too long for this post, but I would highlight one word: uncertainty. The short-run economic effect will be affected by this completely new situation. Understandably, firms will delay investments and important decisions until the new status of the UK is agreed with the EU. Once the agreement comes into force, firms might fly and relocate elsewhere in Europe. This will likely throw the UK into a recession and hurt employment numbers. The British Union is likely to suffer: Scotland will push for independence and Northern Ireland might push for reunification. Universities are also big losers. EU students wanting to study in the UK will now probably rethink their choice until the uncertainty dissipates: this means less talent and less money will come to the UK. Diversity on campuses will diminish. British students will lose access to the Erasmus program which allows them to study abroad in Europe. Overall and without getting into details, it will become harder for everyone to work or study in the UK until the uncertainty dissipates. The same applies to Britons in the EU. The long-run forecast is more difficult. As EU trade treaties will not apply anymore once it leaves, Britain will have to renegotiate all of them. Eventually, the economy will stabilise and recover, but it will lose attractiveness. Foreign investors, start-ups, young talents and so on see the UK as a fantastic place to invest or set up partly because it is part of the EU. With this door closed, they will look for alternatives in the continent. Many will leave and many more will just not come in the first place.

The relationship between the UK and the EU

Now here comes the crux of the matter. The Treaty on the European Union contemplates exits in its Article 50. The procedure is the following: the UK has to notify the European Council its desire to leave. Then, the UK and the European Council negotiate an ‘exit agreement’. Once it is reached, the European Parliament has to approve it by a qualified majority. Then, ‘The Treaties cease to apply to the State in question from the date of entry into force of the withdrawal agreement’. There is a very important point here: the European Council negotiates the new situation with the UK as an outside actor, not a member of the Council anymore. Whatever the final agreement is, the UK is not in a position of strength and stands to lose. If it wants to remain part of the internal market, as many ‘Leave’ supporters argued, it will have to accept European standards, allow free movement of people and contribute to the European budget, like Norway does. The Article 50 is not the only possible outcome; other agreements can be reached. However, if the EU wants to be credible, it must strictly stick to the Treaty provisions. Any concession will undermine its legitimacy, create a dangerous precedent and give wings to Eurosceptic forces around the continent to further disintegrate the union. Sadly, the first divisions are already arising. Several finance Ministers, François Hollande, Jean-Claude Juncker and Martin Schultz have asked the UK to start the procedure as soon as possible, saying it won’t be an amicable divorce. On the other hand, Merkel says there is no need to be nasty on the UK, opening the door for a more favourable agreement. This is dangerous for the whole Union (I will develop the possible outcomes and the relationship-in another post).

The consequences for the EU

They are contradictory. For instance, Brexit could actually be positive. The British conception of the EU as a big economic market has done much harm to European integration. The UK has constantly slowed down European initiatives, filibustered many actions that could have led to a closer union and has an important part of responsibility in the frustration created by this EU. Many pro-European actors will be happy to see such a burden leave. But as I mentioned in the introduction, it is also the biggest setback in European history. For the first time, a member state leaves the European project and menaces to trigger a dangerous domino effect. The Austrian election was already a worrying sign. If Britain reaches a successful deal with the EU, nationalist parties in the EU will probably push for the same, endangering the whole project. Hopefully, this could be the major catharsis the EU needs to reform. Unfortunately, none of the actual national leaders has the European vision to lead a major reform project. A truly and rare European actor is Guy Verhofstadt. Unfortunately, he is in a weak position (he is just an MEP) and he is alone. Some of his policy proposals are right, but I believe the EU has to take a more social turn, not a liberal one.

What the EU must do is to stand up with courage for its core values, to take a battery of measures and to set a grand project for the next years. First, it has to stand up against right-wing nationalism. This means opening borders for refugees, equally redistribute them in European countries and fight the anti-immigration discourse. The measures that could be taken to relaunch the morose European integration include: enhancing transparency, public inversion in transport infrastructures, the end of unnecessary austerity policies, restructuration of the Greek debt, redefinition of the ECB status, dropping the unpopular TTIP negotiations and many more. My idea for a grand project which could reconcile the EU with its disenchanted citizens would be fighting fiscal evasions and tax heavens. It is politically feasible, economically positive and it will show that the EU is effective in tackling today’s world problems and that it works for its citizens.

I will end up on a positive note. It has been said that our generation is disenchanted with the European project. That we take everything for granted and that we do not value what has been achieved. Yet, on the 23rd of June, more than 65% of people aged between 18 and 24 voted ‘Remain’. This does not mean that they agree on everything with the EU, as I do not, but it genuinely acknowledges that the European project is right and that the future of the people of Europe is together. The creation of a truly European youth is succeeding. These voices may have been silenced today, but they will come back stronger. I have no absolutely no doubt that the UK will, as an equal partner, be part of the EU once again in the future. We will welcome them with our arms opened to continue the construction of this outstanding project: the European Union.

© Mario Cuenda García