Brunswick Review The Predictions Issue

The breaks

The likely fallout from the current Brexit confusion

The United Kingdom’s internal and international politics will continue to be dominated by the country’s relations with the rest of Europe for the foreseeable future.

Surely, some might say, a country with such a rich past, proud democratic traditions and stable institutions, having overcome far greater challenges, will be able to sort out Brexit, turn the page and write a new chapter in its remarkable history.

While I am confident that the UK will remain an important player in world affairs, it will nevertheless remain divided about its relationship with the organization at the heart of modern Europe, and that division will bedevil British politics and diplomacy for a long time to come.

faull.jpg

How exceptional are the British?

There may be reason for Britain to see itself as an exception to the EU’s homogeneity. Having served as Britain’s most senior official at the EU, I think it is true that the EU has a significance in the politics, identity and self-esteem of other EU countries which it does not have in Britain. It is often said that the British interest in European integration, outside a small circle of true believers, is and always was transactional, commercial, perhaps geopolitical, but never emotional or passionate. It is also certainly true that many of the British complaints about the EU are shared by other member states. Nevertheless, when one looks at the others, one sees that:

• Former dictatorships of right and left see the EU as a democratic bulwark and a certificate of modernity.

Former Soviet or Warsaw Pact countries see the EU as part of their new international identity and protection against Russia.

Former colonies see the EU as a strong symbol of independence and international identity.

Former occupying or occupied countries see the EU as a peace and reconciliation project.

Countries tied to the EU economy for a large part of their trade and prosperity want to be in the meeting rooms where EU economic decisions are made.

• Countries that do not want the continent of Europe to be dominated by a single country see the EU as the best way to achieve that (they include Germany and France and used to include the UK).

Countries sharing the euro as their currency or aspiring to do so will want to keep it and participate in the making of monetary policy in the ECB. The thought of abandoning the euro, re-establishing a revalued or devalued national currency and re-denominating everything is a major incentive to cleave to the status quo.

The most likely outcome of the negotiations is an agreement unlikely to satisfy hardliners on either side and certain to contain provisions requiring future actions and negotiations which will continue to be difficult.

The UK fits into none of these categories. All the other 27 fit into one or more of them, from Portugal to Poland and from the Baltic Republics to the Island States in the Mediterranean.

As is well known, Britain’s electoral system engenders large, broad-based political parties, “broad churches” with members of different views peering out from inside their capacious tents.

Ever since the European integration process started in the 1950s, the main national political parties and public opinion have been divided and found it difficult to set out a clear, consensual path for future relations.

The EU is built on rules and its institutions see it as their role to promote and defend those rules. This can seem dogmatic and stubborn to the British, who are rightly proud of their flexible unwritten constitution which has been honed and polished down the ages.

But dig a little deeper and one sees that these positions are frequently little more than complacent stereotypes. The EU system has accommodated great changes and challenges in its short lifetime. It has grown from six members to 28. The European Economic Area was created to deal with the failure to secure popular support for EU membership in Norway, Iceland and Liechtenstein, while even more acrobatic politics and lawyering were necessary to cope with Switzerland. Meanwhile, within the EU itself, a baroque system of opt-outs, opt-ins and special arrangements for member states has been created. The UK was a major beneficiary of this system, as the February 2016 agreement in the European Council made clear, recognizing “that the United Kingdom, in the light of the specific situation it has under the Treaties, is not committed to further political integration into the European Union.”

The much-vaunted flexibility of the British constitution has been tested repeatedly in recent years. Brexit has revealed to the world, and perhaps to the British themselves, difficulties created by asymmetrical devolution, the complex system of governance in Northern Ireland and uncertainty as to the respective roles of the Crown, the Government, the two Houses of Parliament and the Judiciary in important aspects of contemporary affairs.

It should not surprise anyone that the negotiations between two parties with complex constitutional mixtures of dogma and pragmatism have proven difficult.

At the time of writing, June 2018, it is likely that the United Kingdom’s departure from the European Union will be based on an agreement which falls short of fully resolving medium and long-term issues in the relationship between the two.

This does not mean that the status quo will prevail. Just as there will be no return to the Obama years in the USA after Trump, whose election victory, like the Brexit referendum result, reflects a trend in world politics as much as it creates one, both the UK and the EU will be affected by the former’s departure from the latter and both will be influenced by developments in the rest of the world.

Globalization is entering a new phase. Trade, investment and competition policies are likely to be used in a more directive way to guide and correct what are seen as imbalances and create or defend local champions, facilities and technologies.  Large countries or blocs of countries will have the scale and strength to deliver such redirected policies, or to think they can. This will create considerable problems for small and medium-sized industrial countries outside trading blocs. For the corporate world, new challenges await as the world’s main trading countries or blocs jockey for position.

In conclusion, the UK is divided on its view of the European Union and its main political parties are unsurprisingly split too, as they have been since the 1950s. The negotiation to withdraw from the EU has also failed to unite the country and the parties. The most likely outcome of the negotiations is an agreement unlikely to satisfy hardliners on either side and certain to contain provisions requiring future actions and negotiations which will continue to be difficult. Every passing year will see claims about money, disputes about regulation and judicial pronouncements and friction at borders, whether physical or virtual.

Hardline Europhobes will be hoping that, once the UK has left, the separation from the EU and all its ways will take hold as the new reality. Their Europhile counterparts will be hoping that the rising generation will count the cost of being outside the EU and press to return to it or at least to forge a closer relationship with it. The real question is how the broad center of British opinion reacts to the changes that leaving will bring about. My not very surprising prediction is that this process will take time and poison British politics for decades.