After the Brexit, Breaking Up Is Hard to Do

After the Brexit, Breaking Up Is Hard to Do

© Stefan Wermuth / Reuters

Britain’s stunning decision to leave the European Union marks Europe’s rude awakening from its long dream of perfect unity. That is decisively over now, and a cold dawn awaits. The EU flag will have one less star in its circle and will symbolize a lot less for anyone who thought institutions that overcome differences and unify nations marked our path into the 21st century.

A process of unraveling no one yet understands now begins. Will Britain become another Norway—closely associated with the EU but not a member of it? Or is the postwar Western alliance fated to give way to a disorderly world with no organizing principle?

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Some economic questions are immediately pressing but may prove morning-after disappointments to those expecting dramatic change as Britain exits the union. Other shifts are likely to be more consequential.  

Consider the regulatory and trade questions in this light.  

“De-Europeanization” is supposed to liberate Britain from the rigid regulation the EU is assumed to have impose on its 28 members. On the trade side, the assumption has been that Britain can negotiate favorable trade terms as a non-member. Really?

The EU purchases half of Britain’s exports, while Britain buys a little over 10 percent member exports. Who’s in a position of strength here? At the same time, there’s no denying the prospect that what remains of the EU is in for real economic and political shifts.

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Sixteen years ago Joschka Fischer, Germany’s foreign minister at the time, delivered his much-noted “United States of Europe” speech at Humboldt University in Berlin. “We must put into place the last brick in the building of European integration, namely political integration,” Fischer declared.

We’re now headed 180 degrees in the other direction. 

Fischer understood the magnitude of the task but spoke with optimism nonetheless. Now we’re stuck with the irony of his prescience: “It is this process of European integration that is now being called into question by many people,” he said. “It is viewed as a bureaucratic affair run by a faceless, soulless Eurocracy in Brussels—at best boring, at worst dangerous.”

There’s a simple way to understand this last remark. Brussels and Frankfurt, seat of the European Central Bank, had 16 years to address the core problem—at bottom a political problem—that has now irreparably damaged the European project. You can’t say they did nothing about it for the simple reason they’ve determinedly made it worse.

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We don’t yet know what impact Britain’s departure will have on international politics, diplomacy, global security, and other large matters. But none of these will proceed as they did until the June 23 referendum. It’s fine that President Obama has reaffirmed the strength of the Anglo–American “special relationship.” But what’s that next to an alliance with the E.U.’s single most influential member?

Certainly, the EU will slip a notch in terms of power and influence. Whether West and non–West are now a step closer to parity, which is inevitable at some point in this century, is another outstanding question. But as a global template for international organization, the EU’s time as the standard is over.  

Britons made a mistake when they voted last week. But there’s no blaming the British for their choice. The real error lies in Brussels, which overplayed its hand long before Joschka Fischer’s speech. Putting administrative prerogative before democratic process is never going to win when people have a chance to vote on it.

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So what does the Brexit vote auger?

The United Kingdom itself is immediately vulnerable. While the Welsh voted with the “Out” camp, Scotland voted by a 62–38 margin to remain in the union. The Scottish National Party, which lost a referendum on independence by a narrow margin two years ago, immediately began to revive the idea of a split. If the Scots can’t veto the Brexit vote, they’ll almost certainly hold a second independence referendum.

What remains of the EU may also be in for fundamental change. Britain has been one of the two strongest voices favoring US–style neoliberal economics. Now the Germans will carry this ball without the Brits.

Populist sentiment against the neoliberal austerity regimes put in place after the 2010 financial and economic crises has been evident on the Continent since the Greeks went to the wall against Brussels and Frankfurt two years ago. Two post–Brexit tests of its strength are imminent.

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One began Sunday, when Spain held parliamentary elections. While Prime Minister Rajoy’s center-right People’s Party won the most seats, the populist Unidos Podemos placed third—below expectations but enough to retain its political influence as an upstart leftist party.

Many analysts doubt Rajoy will be able to end the political deadlock that began last December, when Podemos broke the mainstream parties’—conservative and Socialist—40-year grip on Spanish politics.

Slightly down the road lies the final negotiation for the Trans–Atlantic Trade and Investment Partnership, one of the two huge trade deals the Obama administration has pushed ardently. (The other, the Trans–Pacific Partnership, covers Asian nations.)

The TTIP has faced mounting resistance in Germany and elsewhere for many months, putting in question Obama’s goal of completing it before he leaves office. How will this go now that Britain, Washington’s point man on the EU side, is out of the running?