World, Politics

Stuck in the Middle with EU: Europe after Brexit

By Lara Sierra-Rubia 29 June 2016

The results of the UK referendum mark a watershed for the European project, and have released significant political and economic uncertainty, not only for the UK, but the future of the EU. By LARA SIERRA-RUBIA.

Lara Sierra-Rubia a is Senior European and North American analyst at S-RM (formerly Salamanca Risk Management), a business intelligence and risk consulting company based in Cape Town.

Within hours of the result being announced on 24 June, several right-wing political parties elsewhere in Europe began calling for their own in-out referendums. Ahead of an election year in 2017, Marine Le Pen of France’s far-right National Front stated that the Brexit vote was a “victory for liberty”. She promised immediate negotiations regarding the country’s EU membership terms, and an in-out referendum within six months if her party wins the election.

Similarly, far-right and anti-immigration parties in several other EU member countries – including in the Netherlands, Austria, Italy, Denmark, Sweden, and Hungary – have called for opportunities to renegotiate membership or hold their own votes on remaining in the EU.

While the UK may be an outlier in terms of its historically strained relationship with the EU, public opinion and calls for other similar votes elsewhere speak to a disconnect between other European populations and the organisation. A Pew Research Centre survey published in early June of over 10,000 people showed significant opposition among EU citizens for further European integration.

In France – one of the founding members of the EU – 61% of respondents held an unfavourable opinion. Several other EU member countries, including Greece, Spain and Germany, have also shown a significant decline in support for the regional bloc since 2014. Another survey published this month by the Berlin-based Bertelsmann Foundation also speaks to this trend. The survey, which included 11,000 respondents, showed that French and Italian referendums on EU membership would only result in slim majorities in favour of their countries remaining within the regional bloc.

Moreover, it is becoming accepted that the UK’s vote to leave not only reflected disaffection with the EU itself, but also increasing anger at a political elite that had failed to improve stagnant wage growth and inequality. While many people balked at a statement by Michael Gove, a pro-exit Conservative MP, that “the people are tired of experts”, 17.410,742 voters were apparently not persuaded by the arguments of what was perceived as the intellectual, economic and political establishment.

Similar developments in Europe over the last year indicate that the UK population is not alone. In Spain, a significant portion of votes in the 26 June election went to a far-left anti-establishment coalition of Unidos-Podemos. Austria’s far-right Freedom Party (FPÖ) narrowly lost the May presidential elections. Meanwhile, an Italian political party established in 2009 by a comedian in protest against political elites recently won mayoral elections in Rome.

At this point, there is a cloud of uncertainty hanging over Europe. What happens now largely depends on developments within the UK over the coming months, as well as how protracted exit negotiations proceed.

UK Prime Minister David Cameron has stated that he will step down by October to allow “fresh leadership” to navigate the UK’s withdrawal from the EU. This precludes any immediate move to commence possible negotiations, let alone allow the UK to begin detangling itself from Brussels treaties and institutions by invoking Article 50 of the Lisbon Treaty.

The other 27 EU member states remain unsure over how to proceed with the UK, as no collective road map has been established. However, for the most part, European leaders want Britain to invoke Article 50 of the Lisbon Treaty as soon as possible to prevent continued uncertainty from impacting the region’s economic outlook. Initial murmurs of informal negotiations have fallen flat, with EU Parliament President Martin Schulz leading calls for the formal exit process to commence without further negotiations.

The EU is also in a difficult position in terms of how to respond. The key issue at play is that if the EU allows the UK to gain further concessions in informal negotiations, then other member states will follow suit with similar demands, which would further undermine the EU’s overarching integration project. Furthermore, if Britain emerges from a couple of months of economic volatility and uncertainty relatively unscathed by the initial economic shock and political instability, then other European voters will be tempted to demand their own exit referendums.

Alternatively, if the Brexit vote leads to extended economic turmoil in the UK over the medium term, other EU members may be reluctant to follow the UK into the quagmire. The EU is incentivised to ensure that the UK suffers for opting out, but favouring sticks over carrots may only earn a pyrrhic victory, given how economically interconnected the UK is with the EU.

Furthermore, economic fear-mongering did little to encourage UK voters to remain in the bloc, and punitive measures against the UK may be similarly ineffective in stemming the rising tide of Eurosceptism in Europe. Statements over the last few days by EU leaders in response to the Brexit vote suggest that the EU has not fully acknowledged that the referendum points to a deeper shift in terms of attitudes towards integration. European Council President Donald Tusk’s statement that “what doesn’t kill you makes you stronger” appears particularly worrying in this regard.

In order to survive, the EU must fight to regain legitimacy in the eyes of many Europeans, rather than resting on fragile notions of the worthiness of the European project. Substantive structural and policy changes may be required to demonstrate to Europe’s middle and working classes that the EU shares their concerns. Recent public opinion polls suggest that the institution needs to improve its public relations and communications with the European citizens it represents: a 2015 Eurobarometer survey showed that only 28 percent of UK citizens could answer three questions about the EU’s composition and processes correctly. Furthermore, the Brexit results also call into question the EU’s primary goal of an “ever closer union” – a rigorous debate on this aim will likely be required.

Making the relevant changes will require a great degree of organisational flexibility and agility, something a complex EU bureaucracy is likely to struggle to achieve. However, the clock is ticking. While other EU referenda are unlikely over the coming six months, the French general election, scheduled for April and May 2017, is likely to serve as a critical litmus test for the EU’s future; if one of the founding state’s election results favour a candidate opposed to continuing the European project, the EU may further unravel, with the all the attendant political consequences. DM

Photo: German Chancellor Angela Merkel (L-R), British Prime Minister David Cameron and French President Francois Hollande chat during a meeting on the sidelines of two-days European Union leaders summit in Brussels, Belgium, 18 March 2016. EPA/OLIVIER HOSLET / POOL

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