Europe without Britain

from Europe without Britain: Assessing the Impact on the European Union of a British Withdrawal

Conclusions

That the possibility of the UK leaving the EU in the near future is now more real than ever before should not make us assume it will happen. A move to with-draw is dependent on a myriad of factors, such as the outcome of any attempt at a renegotiated relationship within the EU, the composition of the British government elected in 2015, the outcome of changes to the Eurozone, economic and political moods, and last but not least, the opinion of the British people when tested in a referendum. Nevertheless, the possibility has become more real and if there is to be a renegotiation and referendum, then the issue of withdrawal would need to be discussed by both sides. Discussing withdrawal during any renegotiation may allow the EU and UK to better manage the outcome of a referendum vote supporting withdrawal. Indeed, David Cameron’s hopes – like the hopes of any British government of whatever political composition – to secure a renegotiation within the EU, rests in part on the threat a British withdrawal could damage the EU. Shying away from discussing the implications of a British withdrawal only serves those who seek it, those who benefit from the unknowns surrounding such a decision and those who hope such a move will inflict damage on the rest of the EU. While there has been some discussion of the effect of the UK renegotiating its relationship within the EU, the effects of a UK withdrawal, which could have an equally large impact, have been largely overlooked. While the aim of the EU is likely to be to retain the UK as a member state – a position this author supports – only through pro-active discussion of all options can this be achieved, or the damage of a withdrawal be limited. If the UK, as Labour leader Ed Miliband warned, is sleepwalking towards the EU exit, then the EU should not itself be asleep to what this could mean for the EU.

A vote to withdraw would likely have far more significant implications for Britain than the EU. But the rest of the EU would also have to deal with the departure of one of its largest and most significant member states. Britain’s political relationship with the EU has often been a fraught one, unease at the idea of such aims as “ever closer union” going back to before the UK’s membership and to the very start of European integration. At the same time the UK has contributed much to the EU, its absence from the EU would be palpable, and its awkwardness should not be overplayed to the point where it can be blamed for wider systemic problems in the EU.

A UK withdrawal could open a Pandora’s Box of problems for the EU. These problems can be divided into three inter-related groups. First, how to manage a process of withdrawal, something untested and shrouded in uncertainty. Second, how to manage the implications for the operation of the remaining EU and to wider European integration and cooperation. Third, what relationship to seek with a UK which will remain a significant if somewhat reduced European power.

As this paper has explored, the process by which a member state withdraws – what we have here called the divorce process – is an uncertain one. While Article 50 TEU provides more guidance than existed in the past, it is untested and subject to a range of doubts. Questions would arise as to how to implement Article 50 and how to change the EU’s institutions, budgets and modus operandi to reflect the departure of one of its largest member states. Negotiations would cover a wide range of both practical matters and political relations. A great deal of this would hang on what is agreed for a post-withdrawal relationship. Article 50 contains a series of possible complications, such as how the UK would be denied involvement in European Council and Council of Ministers discussions relating to its withdrawal, but meanwhile it could continue to exercise all other powers and rights within EU decision making. Putting Article 50 to the test would also set precedents, possibly aiding future withdrawals and developing further the idea of expelling a member state.

The timescale of a British withdrawal would be unclear, dependent as it would be on a large number of factors in both the EU and UK. A British referendum in 2017 backing withdrawal would then lead to a two year period of negotiations, putting a British withdrawal around 2019, possibly longer if an extension were agreed. Depending on the post-withdrawal relationship agreed between the UK and the EU, there exists the possibility the UK could continue some formal involvement. While it may seem logical to sideline the UK in advance of a withdrawal, such efforts would need to last for several years. They could easily create animosity on both sides, weakening the prospects of a positive post-withdrawal UK-EU relationship.

While the timescale of managing a British withdrawal – or divorce – might be longer than some think, negotiations both with the UK and within the EU will grapple with much longer-term implications for the operation of the EU and European politics. The UK’s absence from the decision making of the EU would add to ongoing changes to deal with the Euro crisis. It would therefore add to the change in the balance of power within the EU, adding to changes in the direction of European integration. Two questions overhang these changes. First, could the EU become easier to lead? And who and what ideas could benefit from a UK withdrawal and where would this take the EU?

Numerous scenarios exist to answer both these questions. Some point towards a more inward looking EU, others to an EU where the balance of power has shifted further eastwards and towards smaller member states. Alternatively, the Franco-German axis could be strengthened, but it could also be further weakened or further imbalanced to the benefit of Germany. Differentiated integration could become more difficult, with uniformity and centralization made easier by the absence of the strongest opposition to such moves. The creation of a social Europe would still struggle with international pressures. The challenge of a democratic deficit and the need to develop a European demos would remain very much live issues within an EU with or without the UK.

Whether the UK’s withdrawal would make the EU easier to lead is open to debate. While Britain has certainly been an awkward partner, any awkwardness should not lead us to ignore wider problems in the EU. As an example of this we can look to the problems with the Eurozone. A British withdrawal implemented between 2017 and 2019 would not help solve the immediate problem with the Eurozone; only make easier the necessary steps to deal with future problems. The eventual removal of the UK from the EU’s decision making structures would end any possibility of UK vetoes. However, current efforts to solve the Eurozone crisis have shown the EU can lack the necessary solidarity and leadership in an area the UK is largely excluded from. The EU and members of the Eurozone would still divide between those who favour a more federal structure and those who want to preserve sovereignty, between those favouring collective responsibility and those who want to preserve sovereignty. Overcoming such divisions could be made easier by a British withdrawal, but we should not think a British withdrawal can make this happen by itself.

The EU would also need to reach agreement with the UK as to what relationship it would adopt with the EU from the outside. Both the EU and UK would need to come to terms with the ongoing relevance each would have for the other. For the EU, Britain would remain a European power if not an EU-power. For Britain, the EU as a collective relationship would remain its single most important one, more wide-ranging than that with the US. Europe, whether through NATO or relations with the EU, is likely to remain a means to an end for British power and security. In negotiating a post-withdrawal relationship the EU faces several options, each with pros and cons. The EU could agree to the UK adopting a relationship similar to either Norway or Switzerland. It could agree to a customs union similar to that with Turkey. Or the UK could take up the relationship of a WTO member with no special arrangements with the EU. Failure to reach agreement on a withdrawal would lead to the latter. Each of these has implications for the integration of the EU and wider European cooperation. They could change relations with European states not part of the EU, putting to an end hopes of their member-ship of the EU. Other states within the EU may seek to follow the UK, leading to the unraveling of the EU. While the later may be unlikely, the UK’s decision – having been the result of a democratic referendum – could lead to increased questioning of the direction of European integration. A great deal depends on how the UK found life outside the EU and whether the Eurozone can solve its problems. If the UK struggled while the Eurozone stabilized and grew then the UK’s appeal would be diminished. If the Euro continues to struggle then the UK’s decision could start to look like a sensible move. More likely both the UK and the EU would continue to face significant difficulties whether the UK is in or outside the EU.

The EU would also face the problem of how to relate to a UK which, while it would have moved from a decision maker to decision taker, would put great effort into being a decision shaper, given it would still have considerable interests in the EU. Both the UK and EU would need to continue working together over issues of mutual interest, not least of which is the security and prosperity of the whole of Europe. The impact of a British withdrawal on the EU’s geo-political standing also needs to be taken into account. Britain is both an obstacle to and integral to the success of efforts to create a CFSP and ESDP.

As should be clear, the potential implications for the EU of a UK withdrawal are unclear and open to much speculation. This is thanks in part to a lack of discussion of the topic. Indeed, the very idea of dis-cussing a member state withdrawing from the EU remains a taboo subject. This remains the case despite the inclusion of Article 50 TEU and the growing possibility of a British withdrawal. This taboo should be broken. Shying away from discussing it only adds to uncertainty which those seeking the UK’s withdrawal benefit from. More importantly, if the EU is to reach a calculated decision about whether or not to press ahead with a renegotiation then it needs to assess whether or not it is worth making the effort to keep the UK inside on renegotiated terms, or whether it might be better to seek a new arrangement altogether with the UK on the outside.

The possibility then of a UK withdrawal presents the EU with a series of questions:

1. Should the EU refuse to discuss the idea of a British withdrawal until a vote to withdraw actually happens?

2. Should the issue of withdrawal be discussed as part of any renegotiation of Britain’s relationship inside the EU?

3. What red-lines should the EU set down for any discussion of withdrawal, either in any renegotiation or during a withdrawal negotiation?

4. How is Britain’s part in European integration – both positive and negative – to be assessed?

5. To what extent would a UK withdrawal help solve the problems with the Eurozone and make possible further progress towards “ever closer union”?

6. What would a UK withdrawal mean for the EU’s international standing and security?

7. What type of relationship would the EU like to have with a UK that has left the EU, and how would this fit with, or change, the EU’s relation-ships with other non-EU parts of Europe?

8. Should further written clarification be prepared about Article 50 TEU, and if so who is to do this?

9. What processes should the EU follow to manage the internal changes to the EU brought about by a UK withdrawal?

10. How would a UK withdrawal shift the balance of power in the EU and direction of European integration?

Initial answers to these questions should point to how neither the UK nor EU should savor the idea of a British withdrawal. It could be traumatic for both the UK and the EU. This could be especially so for the UK, as it would mean withdrawing from its most important and comprehensive international relationship. The EU, however, should be under no illusions that the impact on it could also be significant.

In the coming decades the world will increasingly enter a post-Western period. As China and India reemerge, they may return to their respective proportions of the global economy prior to the industrial revolution. Never in human history has information been so instantaneously accessible and communication been possible from anywhere on the planet. Never have wealth and prosperity spanned so many geographic boundaries and civilizations, from the northern hemisphere to the southern, the west to the east.

Read the full paper.