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Brexit and the Future of

Europe

PARIS No one yet knows when the United Kingdom will present an
agenda for negotiating its withdrawal from the European Union. But it is
already clear that Brexit will reshape the map of Europe. And, especially given
Britains stunning unpreparedness for the consequences of its own decision
its strategy, priorities, and even its timetable remain uncertain that means
that the EU must start figuring out how to make the best of it. Heres how.
Lets start with the only certainties: the Brexit negotiations will be long,
complex, and acrimonious, and the divorce will have far-reaching geopolitical
effects. The immediate impact is a halt to 60 years of integration momentum.
Europe will suffer in the short and medium term as well, as considerable
political energy is likely to be devoted to Brexit for the next five years, at a time
when the EU needs the strength to confront internal and external dangers.
Over the longer term, Brexit is likely to accelerate Europes exit from the top
table of global decision-making.
Britain will not escape these consequences. Whereas it can leave the EU, it
cannot relocate away from Europe.
That is why, though Britains European partners did not choose Brexit, they
must manage its consequences successfully, which requires balancing two
priorities. Their tactical goal must be to reach a deal with the UK that
maintains the integrity of the EU. The strategic goal is to preserve Europes
prosperity and influence.

It is with these ideas in mind that I, together with several European colleagues
all of us acting in an individual capacity recently co-authored
a paper proposing a concept for Europe in 10-20 years: a continental
partnership that would create a new basis for continued economic, foreign
policy, and security cooperation with the UK.
The basic economic idea is a template for a relationship that is considerably
less deep than EU membership, but rather closer than a free-trade agreement.
If adopted, Britain and the EU could not only preserve their economic ties, but
also provide a new model for the future relationship between the EU and
neighbors that will not join it anytime soon: Norway, Switzerland, Turkey,
Ukraine, and eventually southern Mediterranean countries.
Any proposal regarding the future of the EU-UK relationship must start from
an interpretation of the Brexit referendums meaning. Ours assumes that UK
voters rejected both the legal impossibility of limiting inflows of workers from
the EU and the principle of pooled sovereignty.
These two political constraints should be taken as a given. The first implies
that a lasting arrangement between Britain and the EU cannot include free
movement of labor. The second rules out participation in a common polity,
and thus implies that any cooperation must be based on intergovernmental
agreements.
The first constraint is a serious stumbling block, because the EU is based on
the free movement of goods, services, capital, and workers. The UKs
European partners adamantly claim that these four freedoms are indivisible,
and that if Britain wants to maintain free access to the continental market for
its data processing and financial services, it must accept unlimited access to its
labor market for Polish or Irish workers.
Freedom of movement of workers is undoubtedly integral to the EU. Indeed,
the fundamental right to settle and earn ones living in another country

without asking for permission does not exist anywhere else in the world. For
millions, this right most fully embodies what the EU stands for.
But Britain has made its choice, and the right question to ask now is whether
strong economic links can be preserved without free movement of labor. From
an economic standpoint, the answer is yes: a deeply integrated market for
goods, services, and capital does not require full labor mobility. What is
needed is only enough temporary mobility to accompany the integration of
services markets.
In other words, freedom of movement of workers is politically essential within
the EU, but economically dispensable when dealing with third countries. An
economic agreement with Britain does not need to include it.
The second constraint is of a different nature. Unlike a market for nails or
screws, a market for financial or information services must be based on
detailed legislation that ensures fair competition and protects customers. A
large part of the EUs task is to prepare this legislation. So the question here is
how British producers can retain access to the EU market (and vice versa) if
they are no longer party to the legislation.
Solving this conundrum would be one of the main purposes of the continental
partnership. Through it, Britain would participate in a multilateral process of
consultation on draft EU legislation and would have the right to raise concerns
and propose amendments, so that the outcome of the process would remain as
far as possible consensual. Both sides would be politically committed to
listening to the other. The EU, however, would have the final say, so that its
laws would apply and be enforced.
To enjoy full access to the EU market, Britain would need to agree on a
package of policies essential to the proper functioning of an integrated market:
competition rules, consumer protection, and fundamental social rights, for
example, and perhaps also minimum tax rules to avoid distortions of the type

recently exemplified by Apples practices. Britain would also need to


contribute to the EU budget, from which development funds (the counterpart
to single-market access) are delivered.
Some object that the deal would be too harsh for Britain to accept. But would
the UK be better off losing access to the market of its main trading partner?
Others worry that the EU would surrender its decision-making powers were it
to consult with outsiders. But how would the few without a vote Britain and
others dominate the many with a vote?
Still others claim that such an arrangement would concede too much to
Britain, compelling other countries to aim at a similar status and causing the
EU to unravel. But why would an EU member be better off abiding by rules
and paying into the EU budget without having a vote on the design of policies?
And, far from undermining European integration, a continental partnership
could support the consolidation of the EUs core.
True, there would be a price to pay for everyone. But it would be far lower than
the price, in terms of lost prosperity and diminished global influence, of failing
to create a continental partnership.

INTERNATIONAL NEWS

What Brexit Means for the European


Unions Future
Josh Siegel / @SiegelScribe / June 27, 2016 / comments

Britain, the European Unions second-largest economy after Germany, on June 23


became the first to decide to leave the 28-member bloc. (Photo: Facundo
ArrizabalaGA/EPA/Newscom)
Britains decision to leave the European Union could inspire other disaffected
nations to consider a way out unless the bloc responds to anxiety across the
continent over jobs, immigration, and globalization.
While experts say an all-out breakup of the European Union is far-fetched,
countries both successful (like Sweden) and struggling (such as Greece) may
view the British experience as a model to change their own lots in life.
There is a serious risk that Britains decision to withdraw from the European
Union could set off similar demands on other member states, said Michael
Leigh, a senior fellow at The German Marshall Fund of the United States,
adding:
It was clear even before the British referendum that the EU is facing a
number of problems, and if the EU wishes to regain credibility in the eyes of
the citizens of European countries, it must find a way to tackle its own
disorders effectively, and demonstrate it can function properly.

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Last week, Britain, the European Unions second-largest economy after


Germany, became the first to decide to leave the 28-member bloc.
Leigh, in an interview with The Daily Signal, said the European Union must
not view Britains exit as a unique case, but rather, a consequence of
populist anger that exists throughout the continent. That anger, he said,
is fueled by unease that the global economy has created winners and losers,
and that integration and bureaucracy may be making that gap harder to
close.
According to experts, other member countries with large populations of
people skeptical of the European Unionand also may demand a similar
referenduminclude France, Denmark, Italy, the Netherlands, Hungary,
Poland, and Austria.
>>> How Immigration Fueled the Brexit Result
The European Union also faces other challenges, such as the refugee
crisis sparked by refugees fleeing war and poverty in the Middle East and
North Africa; Russian aggression in Ukraine; and Greeces faltering economy.

We shouldnt really expect the British referendum to be followed by this


sudden surge of integration, Leigh said:
Thats not realistic because theres serious differences of views concerning
the way forward. The main lesson EU leaders will have learned about the rise
of populism is there is no expectation or demand for more Europe. As a
result of the British experience, the people will be looking for pragmatic
solutions and concrete projects to get out of this problem rather than some
new commitment to a more united Europe.
The first big hint of how member governments view the British decision to
exit the EU, known as Brexit, will come as they negotiate the terms of
Britains position outside the union. Also not clear is whether theyve learned
lessons from the result of Britons vote.
In an emergency meeting over the weekend of foreign ministers from the
European Unions six founding statesBelgium, France, Germany, Italy,
Luxembourg, and the Netherlandsleaders expressed a desire for Britain to
quickly invoke Article 50, which would allow the process for severing ties to
begin and set a two-year timeline for doing so.
Leigh, and other experts, say those favoring a fast resolution may try to
impose harsh conditions on Britain, and limit its interaction with the bloc, in
order to make an example of the British.
>>>After Brexit, Paul Ryan Calls for Special Trade Deal With Britain
But other leaders, especially German Chancellor Angela Merkel, considered a
key figure in rebuilding the EU, prefer a more patient approach so as to
preserve the blocs integrity.
The EU is liable to just bully Britain in order to discourage others from
leaving, said James Jeffrey, a former U.S. ambassador to Iraq who
specializes in European security and political issues, adding:
That would be the wrong path to take because instead of discouraging the
political class, they would really be discouraging the general population,
which is fed up with business as usual inside the EU. So the EU could draw
the wrong lessons from Britains exit.
Jeffrey, in an interview with The Daily Signal, cautioned European leaders to
acknowledge the divide between the elite and masses, and seek to do
something about it.

This is a struggle between the cosmopolitan elitenot just bureaucrats but


people who are successful in a modernized globalized economy in Europe
and happy with the idea of an ever closer unionand others who want to
stay a part of their own countries who have a patriotic feeling and dont buy
the EUs goals, Jeffrey said. We have to reform the EU and water down this
idea of a union and take effective action on immigration and address how to
loosen the inevitable mountain of regulations that the EU puts on everybody,
which just drives some people crazy.
Ted Bromund, a Heritage Foundation expert on U.S. and British relations with
the European Union, argues that though member countries have different
conditions, their collective anxiety is animated by the European debt crisis
that began at the end of 2009.
Some nations, like Greece, feel that the EU is bossing them around
politically and economically in a particularly brutal way, Bromund wrote to
The Daily Signal in an email:
In others, the slow growthwhich a result partly of their own economic
policiesis also reflected on the EU. So there is no one single answer
[driving the unrest]. If I had to pick one, it would probably be the economic
factors around the Euro, and the EUs low growth; but they are all wrapped
up together, and you cant pull them apart.
Despite these ongoing challenges, the European Union is likely to limit
decisive action as the two most powerful nations in the bloc, Germany and
France, grapple with national elections in 2017. Leaders of those countries
cannot afford to alienate the populist strands of the electorate.
So, as one expert predicts, the European Unionthe worlds biggest single
economic marketmay trudge on for now, until something dramatic
happens again.
There is a deep taboo among member states leaving the EU, said Tim
Oliver, a professor who is the Dahrendorf fellow on Europe-North America
relations at the London School of Economics and Political Science.
The European institution is about moving forward, not backward, Oliver
told The Daily Signal. Finding a united position is never easy for the EU on a
good day, let alone when it is facing something like this. The EU has so far
muddled through these challenges. They never solve them. They cope.

The future of the EU

Now what?

Europe vows progress after Brexit, but is unsure which way to go


AUGUST usually finds Europes politicians bronzing on the beach or lacing up their walking
boots. But for the past few weeks they have been huddling, scheming and debating how to give
their floundering European Union a fresh lease of life. Citizens will only accept the EU if it
makes it possible for them to prosper, said Angela Merkel, Germanys chancellor, during a visit
to Warsaw last week.
If there is a fresh urgency to the EUs latest bout of navel-gazing, blame Brexit. Britains vote to
leave on June 23rd was a grievous blow to a club that has only ever known expansion. At a
summit six days after the vote, the leaders of the 27 remaining countries vowed reform and
arranged to meet again in Bratislava on September 16th. Much of the recent shuttle diplomacy
has been aimed at finding common ground for that meeting. As ever, Mrs Merkel has taken the
lead. On August 22nd she and her French and Italian counterparts laid on the symbolism by
holding a mini-summit on Ventotene, an Italian island where Altiero Spinelli, an early Eurofederalist, had been imprisoned during the war.
There is no shortage of ideas. This week five senior European analysts and officials issued a
paper calling for a continental partnership, including new decision-making structures for the
single market, which could include Britain as well as other countries on Europes periphery, such
as Turkey or Ukraine. Diehards are dusting off plans for grands projets like a standing EU army
or a Europe-wide intelligence agency.
But in a curious echo of the British governments struggle to move ahead with Brexit, Europes
leaders have not progressed much beyond slogans. This summers terror attacks brought calls for
intelligence agencies to share more information, and for boosting the powers of Europol, the
EUs police co-ordination body. But such suggestions are nothing new. At Ventotene the leaders
urged more defence co-operation. But there is little will to create anything that could rival
NATO.
On refugees, agreement seems limited to a beefed-up EU border force that officials hope to
conclude on later this year. Eastern European governments remain implacably opposed to the
EUs plans to distribute hundreds of thousands of asylum-seekers across Europe. Viktor Orban,
Hungarys combative prime minister, will stage a referendum against the relocation plan on

October 2nd. The easterners also fear a fresh wave of job-killing social initiatives from the
European Commission.
Ideas for deepening integration in the euro zone, from common bank deposit-insurance schemes
to a single finance minister, seem no closer to fruition. Leaders have spoken of a scheme to
tackle youth unemployment, but most of the tools for that lie in the hands of national
governments, which may lack the will to act (a mild labour reform in France triggered weeks of
protests this summer). Coming elections in the Netherlands, France and Germany limit leaders
room for compromise.
The crises that have buffeted Europe in the past few years continue to bubble away. The EUs
talks with Greece over its third bail-out are not going well. The Minsk peace process in Ukraine
is stuck. The Transatlantic Trade and Investment Partnership (TTIP), the EUs mooted deal with
America, has become a piata for electioneering European politicians: this week ministers in
Germany and France declared it dead. And while a deal with Turkey has cut refugee flows,
smugglers are still getting through and Greek islands are dangerously overcrowded. Turkey has
threatened to scupper the arrangement entirely if the EU does not grant visa-free access by
October.
Brexit does little to fix any of these problems. (In some cases, such as TTIP, it makes them
harder.) And managing the departure of a major country presents the EU with an entirely new
sort of challenge. The will to keep the club together is strong, and predictions of further exits to
follow Britains are overblown. But the old adage that Europe is forged only in times of crisis is
starting to look threadbare.