Brexit would leave EU less lib­eral, less At­lanti­cist

Pakistan Observer - - INTERNATIONAL -

APAUL TAY­LOR Euro­pean Union with­out Bri­tain would be fi­nan­cially poorer, less eco­nom­i­cally lib­eral and free-trad­ing, less At­lanti­cist and less open to fur­ther en­large­ment. A Bri­tish vote to leave the 28-na­tion EU in a ref­er­en­dum on June 23 would not only deal a se­vere blow to the union’s self­con­fi­dence and in­ter­na­tional stand­ing, am­pu­tat­ing it of its sec­ond big­gest economy and one of its two main mil­i­tary pow­ers.

It would also blow a hole in the EU’s com­mon bud­get and tilt the bal­ance away from the open, com­pet­i­tive economy fa­vored by the Nether­lands, Sweden, Ire­land and cen­tral Euro­pean states, to­wards pro­tec­tion­ism and heav­ier reg­u­la­tion.

Even com­mit­ted Euro­pean fed­er­al­ists ac­knowl­edge that Bri­tain has made ma­jor con­tri­bu­tions in open­ing up the com­mu­nity’s in­ter­nal mar­ket, pro­mot­ing an out­ward-look­ing for­eign pol­icy and shar­ing a prag­matic, em­pir­i­cal ad­min­is­tra­tive cul­ture.

“We would lose the in­trin­sic value of Great Bri­tain – its global geopo­lit­i­cal vi­sion, eco­nomic com­mon sense and fi­nan­cial and le­gal know-how,” said Sylvie Goulard, a French mem­ber of the Euro­pean Par­lia­ment from the cen­trist lib­eral ALDE group.

Sup­port­ers of a more deeply in­te­grated po­lit­i­cal union cen­tered on the 19-na­tion euro cur­rency area would have no cause for re­joic­ing, since euroscep­tics else­where would be em­bold­ened to press for their own rene­go­ti­a­tions and ref­er­en­dums.

“The real risk is not (Bri­tain) re­main­ing in the EU, it is a leave vote, which could per­pet­u­ate the dis­in­te­gra­tion of the en­tire Euro­pean Union,” said for­mer Bel­gian Prime Min­is­ter Guy Ver­hof­s­tadt. A keen fed­er­al­ist, he rep­re­sented the Euro­pean Par­lia­ment in ne­go­ti­a­tions be­tween Prime Min­is­ter David Cameron and other EU lead­ers in Fe­bru­ary that led to a deal ex­empt­ing Bri­tain from the EU’s treaty goal of “ever closer union”.

“Brexit would make the nar­ra­tive of the EU about dis­in­te­gra­tion, not in­te­gra­tion,” re­searchers at the Lon­don­based Cen­tre for Euro­pean Re­form said in a re­port en­ti­tled: “Europe af­ter Brexit: un­leashed or un­done?” Even com­mit­ted Euro­pean fed­er­al­ists ac­knowl­edge that Bri­tain has made ma­jor con­tri­bu­tions in open­ing up the com­mu­nity’s in­ter­nal mar­ket, pro­mot­ing an out­ward-look­ing for­eign pol­icy and shar­ing a prag­matic, em­pir­i­cal ad­min­is­tra­tive cul­ture

For one thing, much of the EU’s time and en­ergy would be con­sumed for the next two years or longer by wran­gling over the terms of with­drawal and the UK’s fu­ture re­la­tions with the bloc. Aside from that, the EU’s his­toric Franco-Ger­man axis seems too weak to agree on any ma­jor strength­en­ing of the euro zone, at least un­til af­ter elec­tions in both coun­tries in 2017. “I don’t think Europe can trans­form it­self and make a bold leap for­ward in in­te­gra­tion with the cur­rent cast of po­lit­i­cal char­ac­ters. Per­haps with their suc­ces­sors,” Goulard said.

Un­pop­u­lar French Pres­i­dent Fran­cois Hol­lande is in the last year of his term, while Ger­man Chan­cel­lor An­gela Merkel is con­strained by do­mes­tic re­sis­tance to an in­flux of refugees and to any more risk-shar­ing with south­ern euro zone coun­tries.

Power dy­nam­ics: The power dy­nam­ics of Euro­pean lead­er­ship would change if Bri­tain quit. Ger­many would lose a coun­ter­weight to French eco­nomic di­rigisme. France would lose its main part­ner in sup­port­ing EU mil­i­tary mis­sions in Africa and else­where. Europe might be less in­clined to stand up to Rus­sia, or to work as closely with the United States.

The EU would re­main di­vided into a ma­jor­ity of coun­tries which share the euro, and a mi­nor­ity that have not yet joined or have voted to stay out.

But those non-euro coun­tries – Sweden, Den­mark, Poland, the Czech Republic, Hun­gary, Bul­garia, Romania and Croatia – would have less clout with­out Bri­tain’s pres­ence as the main fi­nan­cial cen­ter out­side the sin­gle cur­rency area. Gun­tram Wolff, a Ger­man econ­o­mist who heads the Bruegel eco­nomic think­tank in Brus­sels, said the Ber­lin es­tab­lish­ment was in a funk, fear­ing that “we are left alone with all those Mediter­ranean spend­ing coun­tries with a pref­er­ence for re­dis­tri­bu­tion and we are go­ing to pay for them and drift away from a lib­eral, pro-mar­ket, TTIP Europe. That’s the big angst.”

Among the headaches for the EU would be how to make up for Bri­tain’s con­tri­bu­tion to the com­mon Euro­pean bud­get, most of which goes on sub­si­dies to poorer re­gions and to farm­ers. The UK is the num­ber three net con­trib­u­tor af­ter Ger­many and France, pay­ing in an av­er­age 9.23 bil­lion eu­ros a year more than it re­ceived from EU cof­fers in 2010-2014, ac­cord­ing to the Euro­pean Com­mis­sion. It would con­tinue to pay con­tri­bu­tions for at least two years un­til it fi­nally left.

—Cour­tesy: AA. [Paul Tay­lor is the Euro­pean Af­fairs Edi­tor for Thomson Reuters. Tay­lor has been a Reuters cor­re­spon­dent for 37 years, serv­ing mostly in Europe and the Mid­dle East. Since 2008, he has also writ­ten the fort­nightly In­side Europe col­umn in the In­ter­na­tional New York Times].

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