Tim Oliver / Jul 2016
Brexit is not an event, more a process of overlapping negotiations. It will produce a new UK-EU relationship that is not a simple in/out dichotomy but more one of fifty shades of Brexit.
How will the rest of the EU respond to this process? Will the EU’s approach be defined by institutional links, the opinions of key leaders, economic and security interests, international pressures, or ideas about integration or disintegration?
Will it be a mix of these, in which case, which will be the most influential? What should the British government and public look for in order to understand the EU’s position?
Back in December 2015 I mapped out the 5Is through which we could understand how the EU would respond to a Brexit: ideas, interests, institutions, the international, and individuals. In the week since the vote to leave it has become clear that no one ‘I’ will dominate, nor will there be a clear in/out choice. Britain’s departure from the EU will be more a case of fifty shades of Brexit.
Britain’s vote to leave the EU means it has rejected completely the idea of an ‘ever closer union’, challenging in an unprecedented way one of the EU’s underpinning ideas. Will the idea of European disintegration now take hold across the EU as some domino effect sees other governments and their citizens give up on the EU? Or will other EU member states respond in much the same way as they have to many other crises by muddling through and trying to integrate further? If so, then any new deal with the UK will prioritise EU unity, blocking any UK-EU deal that allows Britain a privileged alternative relationship that would weaken the Union.
However, individual member states will assert their own ideas of what Brexit means for them. For example, the Irish Government has made clear it will not be caught in the slipstream of British decisions. Independence and links to the EU are viewed as equal to or of greater importance than relations with Britain. For states ranging from Greece and the Baltic states through to France and Germany, Brexit – along with the renegotiation and referendum – are viewed as a distraction from various ideas of how European integration can better ensure the security and stability of Europe.
Britain’s place as one of the world’s largest economies leads some Eurosceptics to argue the EU needs the UK more than the UK needs the EU. Britain does run a trade deficit with the EU (£61.6 billion in 2014), meaning the rest of the EU now has an economic incentive to find a new relationship fast. However, from the perspective of the rest of the EU it is the UK that is vulnerable. Britain represents somewhere around 16% of total EU trade (admittedly excluding services) while the EU represents 44.6% of the UK’s exports of good and services in 2014.
Nevertheless, economic, social and security interests play a powerful role. To take one example, fear amongst German car manufacturers at a bad UK-EU exit deal has already led to pressure on the German and other governments to push for a relationship that avoids any disruption to trading links. The potential costs for Ireland (including violence in Northern Ireland) could force it to reconsider its ideas of resisting British decisions. The large EU population in the UK and UK population elsewhere in the EU mean a mutually beneficial deal will need to be hammered out.
The argument works against Britain as some states have already sought to gain economically by seeking to attract investment away from Britain. Some countries might also now use Brexit to push a more social and protectionist EU.
If the potential economic interests are not strong enough, then the same cannot be said for Britain in European foreign and defence cooperation. Common areas of concern such as Iran, Russia or migration mean the UK and EU will come under pressure to continue cooperation. At the same time, the UK has been one of the blocks to cooperation in this area, with its exit potentially paving the way for further such efforts.
Several processes and institutions will shape Brexit. Article 50, the EU treaty’s withdrawal clause, provides a degree of structure for both sides, albeit one that is untested and contains a range of flaws. The legal and administrative issues alone make Article 50 a Pandora’s Box that both sides face with a sense of trepidation. Agreeing a new UK-EU relationship will require the consent of every member state, the European Parliament, and potentially may draw in the European Court of Justice. None of these can be relied on to grant a quick agreement that meets UK demands. Agreeing an exit deal and a new relationship throw up a range of questions about how they are to be approved, and whether they should be negotiated together or one after the other.
The UK and EU are also constrained by existing European and international structures. If no new relationship is agreed and the UK leaves in the way set out in article 50, then the EU would still have to work within the limits of World Trade Organisation rules, although Britain is highly unlikely to benefit much from a WTO defined relationship. The European Free Trade Area and the European Economic Area have existing agreements that Britain would have to fit into with the agreement of members such as Norway or Switzerland.
International pressures on the UK and the EU could define how they manage Brexit. The negotiation of a Transatlantic Trade and Investment Partnership (TTIP) reflects a desire by the USA and the EU to use their interdependent economic relationship to shape global economics and politics. While the UK could be locked out of the main processes by which TTIP will be setup and launched, its long-term exclusion would run counter to the aims of TTIP to extend beyond the EU and USA. The agreement will also frame how the UK attempts any trade deals of its own with countries such as China or Brazil.
International events will also drive UK-EU cooperation. Terrorist attacks, aggressive behaviour by Russia (perhaps creating an ‘other’ against which common UK and EU resolve is formed), common concerns about environmental or migration crises could mean international events push the UK and EU towards a harmonious new relationship. British ideas about restructuring the EU and freedom of movement have gained some traction thanks to developments connected to Syria. That said, international events could cause divisions and animosity between the UK and parts of the EU, such as happened over the Iraq War.
If there is one place where animosity could be a particular problem it is in the relations between leaders. It remains to be seen whether the new Prime Minister will be in a position to compromise in negotiations with the EU over a new UK-EU deal.
EU leaders might be in a mood to concede much, particularly given the efforts many of them feel they made over the renegotiation. Angela Merkel, in particular, could find herself in a difficult position. With German elections scheduled in 2017 she may be in no position – or personally inclined – to offer much to the new British prime minister. Without German support, Britain will face a much bigger struggle in securing the agreement of every other EU state and its leadership.
Fifty Shades of Brexit
There won’t be any sudden UK-EU divorce. Brexit is a process, not an event and the future of UK-EU relations will likely vary from area to area. Instead of a simplistic narrative of in/out we need to think of future relations in terms of different shades of grey. Some areas of cooperation will be light and cooperative, others destined to a black nothingness.
Sketching out these shades of grey over the next few months and years will, however, be determined largely by a choice between access to the single market and freedom of movement.
As the EU has already made clear, if the UK wants to maintain unhindered access to the single market (still considered by many in the UK to be a vital economic interest) then it looks likely it will have to agree in some way to continued free movement. That pits the EU’s idea of free movement and political integration against the ideas that largely (but not entirely) shaped the victorious leave campaign in the UK: sovereignty and a halt to free-movement.
Finding a solution to this will run the risk of damaging the interests on all sides, will be shaped by institutional limits in both the UK, the EU and in the structure of relations between them and internationally, international events that push the two together or apart, and the outlook of individual leaders and their own domestic calculations.