On June 23rd 2016, all eyes will be on the United Kingdom as voters decide on the country’s membership in the European Union in a public referendum. With the steady flow of refugees entering Europe and the rise of right-wing populist parties in the EU, the upcoming decision on a potential “Brexit” comes at turbulent times, and is considered to have implications that go far beyond the UK’s domestic sphere. As one of the EU’s largest and wealthiest member states, Britain’s EU exit would not only send shock waves across the entire continent, but might also fundamentally reshape transatlantic relations. It is therefore no surprise that President Obama addressed this topic on his recent visit to London, taking a position in favor of the UK remaining in the EU.
To discuss the implications of UK’s referendum in more detail, the Center on the United States and Europe (CUSE) at Brookings, in cooperation with Heinrich Böll Stiftung North America, hosted a discussion on May 6. In three panels, experts from both the UK and abroad debated the pros and cons of a “Brexit”, the underlying legal, political and foreign policy factors shaping the referendum debate, as well as the international economic and financial dimensions of a potential Brexit.
The event started with a lively discussion between Douglas Alexander, former UK shadow Foreign Secretary, and John Longworth, former Director General of the British Chambers of Commerce. Alexander made his case for the “remain-side”, declaring that a Brexit would be disadvantageous for both the EU and the UK. From an EU perspective, a Brexit would result in a loss of size, economic power and political influence on the international level, taking into account Britain’s permanent seat in the UN Security Council. From the UK’s perspective, a Brexit would result in political and constitutional instability, as well as deep uncertainty regarding the UK’s relationship with Europe, since various models – the Norwegian, the Swiss or the Canadian – could come into play. In contrast to Alexander’s position, Longworth advocated Britain’s exit from the EU, which he considers to be a “fundamentally undemocratic, corrupt and corrupting organization”. His main arguments, however, referred to the economic sphere, emphasizing that 87% of the UK economy is not associated with exports to the EU and that trade deals are not a necessary prerequisite for trade relations. A Brexit would thus not automatically weaken the British economy.
In contrast to the rather polarized debate during the first panel, the second panel took a more neutral perspective. Panelists Anand Menon, Damian Chalmers and Richard Whitman are all involved in the the “UK in a Changing Europe” initiative, which is funded by the British Social Science Research Council and aims to inform British voters about the claims made by both sides of the referendum debate, including topics such as immigration and economic costs and benefits. With regard to the current poll results, Menon pointed out that both the “remain” and “exit” campaigns have had little impact so far, as polls have not significantly shifted over time. According to his assessment, many people have not started to think about the upcoming referendum and it will take a while before it becomes the focus of popular attention.
Damian Chalmers referred to the legal dimensions of a potential Brexit, clarifying that the complexity of post-EU negotiations would very much depend on what kind of arrangements the UK government has in mind. With regard to mobility and mobility of labor, Chalmers believes that it is highly unlikely that the UK would force residents from other EU states to leave the country, although a Brexit could trigger a discussion about the withdrawal of benefits for EU citizens.
Richard Whitman gave some final insights about the foreign policy implications of a potential Brexit. He referred to the UK’s relation to Ireland and the future of the Northern Ireland peace process as particularly interesting topics that the UK government would have to address, since they touch both domestic and foreign policy issues. According to Whitman, the EU/NATO relationship, is “a footnote rather than a prime mover” in the Brexit debate, due to the rather modest EU development in the field of security and defense policy.
In the third panel on the international financial and economic implications of Brexit, Timothy Adams, Bertrand Badré and Heidi Crebo-Rediker agreed that there is considerable concern from the global financial community regarding a potential Brexit. Due to the fact that nobody knows what a potential post-EU scenario would look like for the UK, the only thing to be absolutely certain about in case of a Brexit, is uncertainty. According to Crebo–Rediker and Badré, the global economy is already in a fragile state, and the UK referendum thus presents an unnecessary crisis and a great risk to the global markets. Adams followed this assessment, emphasizing that the global financial markets are currently hypersensitive.
Getting closer to the referendum, it is likely that the divides between the pro-EU and anti-EU campaigns in the UK will broaden. As these discussions illustrated, a potential exit from the EU will not only create great uncertainties for Britain’s direction but also for the future of the entire EU and transatlantic relations.
To read the transcript of the event, click here.
