On Brexit - a view from the UK

EUROPEAN LETTER of Dominik Coudenhove-Kalergi, London, published by the European-Society Coudenhove-Kalergi, editor Sec.Gen. Heinz Wimpissinger

On June 23^rd 2016, just under 17.5 million people voted in a referendum, by a majority of 51.9%, to leave the European Union. Membership of the EU has long been a topical issue in Britain, with the country having joined the European Economic Community in 1973 and a previous referendum on continued membership, having been held in 1975.

In a misguided attempt to unite his Conservative Party and stop its increasingly Eurosceptic backbenchers ‘banging on about Europe’, David Cameron promised in January 2013 to hold a Brexit referendum if his party was re-elected in May 2015.

The referendum followed a botched renegotiation of the current conditions of Britain’s EU membership at a summit in Brussels in February and the country woke up on ‘Black Friday’, following the resignation of the Prime Minister and the simultaneous internal meltdown of the opposition Labour Party, facing potentially its largest political crisis since World War II and certainly its largest economic one since 2007-2008.

During the campaign, Leavers argued that they wanted tighter border controls, stronger internal sovereignty and the freedom to not be governed by a far-away organisation that they felt increasingly disenfranchised from. For Remainers, the arguments were less emotional and centred around diminished global influence, risks to national security and the potential fallout from job losses, lower investment and weaker trade. Ultimately, many believed that the final decision was immigration versus the economy. Worryingly, the majority of people who voted Leave were seemingly aware of the economic risks (as forewarned by the IMF, Treasury, OECD, etc.) but no longer cared. Instead, a populist backlash against the centre ground and globalisation has led to disaffected voters feeling increasingly threatened by immigrants taking their jobs and health benefits and the sense that the gulf between ordinary and better off people has continued to widen. This feeling of inequality has been exacerbated by a resentment towards the over privileged politicians in Westminster who govern them and so the vote to Leave was, in part, a hostile reaction to the establishment and the desire for change. It has been easy to generalise Leavers as xenophobes, and some invariably are, but in search of a scapegoat, this condemnation has been too widespread and there are also certainly many who voted Leave because of genuine liberal principles who truly wanted to ‘take back control’.

 The reality is that Britain has actually lost control and is in danger of imploding, especially as nobody was prepared, including ‘Brexiters’, for what might happen if they actually won. There followed turmoil in the financial markets as investors lost trillions of US dollars in global stock markets and the UK pound fell over 10% to a 31-year low against the US dollar. Britain is most likely heading into recession as investment is on hold, the property market is showing cracks, companies have frozen hiring and Business has been thrown into a black hole of indecision. Europe is also reeling as the very future of the bloc seems threatened with other populist and anti EU forces in France, Netherlands, Sweden, Austria and Denmark (not to mention Donald Trump) rubbing their hands gleefully, as they start to mobilise their own efforts to call referendums, if they are elected. And now, the future of the United Kingdom is at risk as Little Britain will surely emerge, when Scotland (and possibly Northern Ireland) most likely votes in a second referendum to become independent.

 Fortunately, some sense of normality has returned after weeks of insanity. Financial markets have recovered much of their losses (except for Sterling) and Theresa May, despite softly campaigning to Remain, has become the new Prime Minister. She has often been compared to Angela Merkel and is seen as a safe pair of hands with considerable experience. She should be praised for wanting to get the job done and trying to unify her fragmented party with her newly appointed cabinet. However, unifying her fragmented country will be considerably harder and many questions still remain unanswered, in particular, on what Brexit actually means? Despite the EU, understandably, wanting Britain to immediately trigger Article 50 of the Lisbon Treaty, the legal mechanism for EU withdrawal, nobody back home seems in any urgency to start the process. The government wants more time to decide what sort of deal they are able negotiate with the EU and whether such a co-operation should be similar to the Norwegian, Swiss or Canadian models. The prevailing issue remains, of course, what divorce settlement is agreed upon and, ultimately, whether Britain can have access to the single market without free movement of workers. The EU, currently, has a very clear answer to this.

 Some observers doubt that Brexit will actually happen, that it could be delayed indefinitely, that the referendum was non-legally binding and therefore void, that a second referendum could be called with the feeling of ‘Regrexit’ reversing the vote, and so on. The possibilities are endless and therefore so is the uncertainty. Brexit has been shocking, sad and scary and nobody knows what the final outcome will be. What is certain though, is that both Britain and the EU are weaker for it and that many may live to regret the decision made by Mr Cameron on that fateful day in January three and a half years ago.