Where do Britain and the EU go from here?

Nigel Farage, leader of the U.K. Independence Party, celebrates after Thursday's vote by Britons to leave the EU. (AP Photo / Matt Dunham)

Nigel Farage, leader of the U.K. Independence Party, celebrates after Thursday’s vote by Britons to leave the EU. (AP Photo / Matt Dunham)

I’ll be damned. They did it.

Britons voted decisively Thursday to leave the European Union, leading to a selloff in equity markets around the world, a sinking of the British pound, the resignation of Prime Minister David Cameron, and a great deal of uncertainty about what comes next.

Don’t let anyone, europhile or euroskeptic, fool you. No one really knows what will come after the estimated two years of negotiations it will take to carry out the wishes of the British people. Some people think it will be disastrous for Britain, while others think it will open the door to a glorious new era of Rule Brittania. I suspect the result will be somewhere in the middle, and dependent wholly on the decisions British leaders make in the years to come.

If the decisions lead Britain toward a more open economy than the heavily regulated one sought by Brussels bureaucrats, its future may be bright indeed. But if they lead Britain toward a more insular existence, it will suffer. The country essentially faced a choice similar to the one Americans will face this fall: Continue the same largely unsatisfactory but knowable arrangements of today (Hillary Clinton/Remain), or take a chance on something different but undefined (Donald Trump/Leave). Unfortunately for us, we won’t know how it worked out for Britain until our next president is well into his/her first term, if then.

***

Of equal importance will be whether, and how, the EU itself changes after this vote. In my observation of the union over 4.5 years working in Brussels, there was much left to be desired.

The EU has long been a union that, if not completely undemocratic, was certainly one of the elites, by the elites, for the elites. On those occasions when popular votes were held in individual countries and measures rejected — the defeats of the EU Constitution by the French and the Dutch in 2005, for instance — the response of the elites was simply to give the people more or less the same thing in different packaging. Not coincidentally, neither the French nor the Dutch were given a chance to vote for the replacement, the Treaty of Lisbon. When the Irish rejected the treaty in 2008, they were given a few promises — but no actual changes to the document — and made to vote on it again the following year. This is something of a pattern in EU referendums, although it seems clear Britons’ vote on Thursday, even though it was non-binding, will be considered final.

The only directly elected European institution, the European Parliament, has typically been filled with members elected based chiefly on national passions of the day. To the extent pan-European “parties” exist, they have mostly been loose coalitions based on general philosophical agreement, and not really the kind of entities that can set agendas and run multinational campaigns to enact them. In my experience, this rendered the Parliament the weakest of the EU’s institutions.

The result has been similar to what we’ve seen here with the strengthening of the executive branch at the expense of the Congress: To a large extent, it’s the bureaucrats who are in charge. The heavy economic regulation I mentioned earlier, against which Britain had long chafed, comes from the bureaucracy via the un-elected European commissioners (one is sent from each nation, and then assigned a portfolio such as trade or energy policy). The staffs they lead are the Kennedy “best and brightest” on steroids, blending from their home nations into a Brussels culture that exists on its own, at once derived from and foreign to anything their countrymen would recognize. It’s not at all dissimilar to the parochial Beltway mentality in Washington.

***

From here, the EU also has its choice of directions. Britain’s traditional euroskepticism had long worked as a check on some of the EU’s ambitions toward ever-greater union in a quasi-superstate. On the one hand, it will be tempting for those elites to move forward with the plans that had been more difficult with Britain hanging around. On the other, the same sentiment that drove Britain out of the EU exists in other countries. There will be immense pressure on other national leaders not to allow votes of the type Britain just took. But the vote also offers opportunity for their political rivals to campaign on offering just such a choice; issues such as immigration, and the effect on jobs and wages, resonate with many Europeans beyond Britain. What the EU chooses to do now may determine whether such campaign promises are attractive, or not.

A Britain-less EU will be even more dominated by France and Germany. Without the pull between Britain and the Continent, the tension in the union will probably be even more about Germany and France vs. the still-derelict “PIGS” economies of Portugal, Italy, Greece and Spain (with a consistent undercard of Western Europe vs. the Central and Eastern European nations more threatened by the nearby presence of Russia). Britain’s departure takes one large, relatively anti-regulation voice out of the room, but it also removes one large, relatively strong voice regarding fiscal sanity. The EU’s faux-tough love toward members that ran up large deficits at home while participating in the common currency will be harder to fake now (even though Britain had chosen not to adopt the euro). If the technocratic-management approach favored by France and Germany grows more powerful without Britain’s countervailing voice, some smaller countries that often sided with Britain may find themselves growing more dissatisfied.

It is hard to imagine smaller countries being willing to leave the EU, but there are examples for them. Norway, Iceland, Switzerland and even Liechtenstein have opted all along to join only the EU’s free-trade zone (EFTA), avoiding some of the deeper integration that Britons finally rejected. That arrangement is truer to the original goal of what grew from the European Coal and Steel Community into today’s EU. If Britain ends up joining EFTA and growing more prosperous, we may see a devolution by other nations toward that earlier idea. That could be good for all of them.

Reader Comments 0

78 comments
332-206
332-206

Clinton Ad of the Day:


"Check your 401 account.

If you liked Brexit,

You'll love Trump!"

Caius
Caius

And this for your continued entertainment:


Article 50 TEU: Withdrawal of a Member State from the EU

SUMMARY

The right of a Member State to withdraw from the European Union was introduced for the first time with the Lisbon Treaty; the possibility of withdrawal was highly controversial before that. Article 50 TEU does not set down any substantive conditions for a Member State to be able to exercise its right to withdraw, rather it includes only procedural requirements.It provides for the negotiation of a withdrawal agreement between the EU and the withdrawing state, defining in particular the latter's futurerelationship with the Union. If no agreement is concluded within two years,that state's membership ends automatically, unless the European Council and the Member State concerned decide jointly to extend this period.

Caius
Caius

Well I will take my turn at predicting.  Expect Scotland and N. Ireland to have "exit the UK" votes in the next couple of years.  Both voted heavily to remain in the EU.


Exiting the EU is going to be a painfully slow process to watch, about like watching grass grow. PM Cameron says he will not even start the process but will let his successor do so when he takes office in October.  On the flip side the EU wants to start yesterday.


In 5 to 10 years expect a "new" EU centered on Germany minus France, Italy and Spain.

And, what will US companies with manufacturing/distribution centered in the UK do with those facilities?  They are losing 80% of their market if, in fact, the UK leaves the EU. 


Lil_Barry_Bailout
Lil_Barry_Bailout

Why would US companies in the UK lose business with the EU? Britain is only leaving the EU, they aren't leaving Earth.

lvg
lvg

@Caius @Lil_Barry_Bailout Please explain----Members of Stupid Party and their chosen leader have difficulty with that concept.

Lil_Barry_Bailout
Lil_Barry_Bailout

Democrat Tim Kaine on Obama's failed foreign policy: "Sometimes not doing stupid stuff leads you to not do stuff that's stupid not to do."

Seems like Obama trying to manipulate the British people was stupid. Now he's boxed himself in and further damaged relations with an important ally.

lvg
lvg

So the candidate for US presidency does an infomercial and press conference from his latest venture in Scotland after Brexit vote, and he sees no problem of mixing business and campaigning as supposed RNC spokesperson? Then he boasts about being in favor of Brexit and praises Brits for their decision. Fool didn't realize Scots overwhelmingly voted against Brexi and want to stay in the EU. Image of "ugly American" on full display Thursday.

And he promises to crash the markets in US if he becomes president.Kyle and cons here  sees no problem with all of  that.


RafeHollister
RafeHollister

@lvg And Obama trotting off on a special trip to tell the British they were stupid if they voted for Brexit and he was going to put them in the back of the que, was just diplomacy, right.  Ugly American President?  


Trump is supporting what they did, not talking about what a poor decision they made, as the Dems are doing.  I'd say he is being supportive.

Lil_Barry_Bailout
Lil_Barry_Bailout

Obama lost, which of course means Americans and freedom-loving Brits win. What does he do now? Act like a petulant child, stomp his little foot down, and determine to be an ugly, sneering obstructionist?

That would fit the pattern of the last seven years.

Eye wonder
Eye wonder

Trump is playing you. Are you always this easily punk'd?

Nick_Danger
Nick_Danger

@RafeHollister @lvg 

Gotta quote on that "stupid" remark, or was that a lie? 

The President of the US has the responsibility to represent US interests.

stogiefogey
stogiefogey

Kudos to the Brits, they did the right thing. Probably the beginning of the end of something (EU) that should've never happened.

Wascatlady
Wascatlady

"I'll be damned."  Are you allowed to say that, Kyle?

MarkVV
MarkVV

Regrets are already setting in. 

Hedley_Lammar
Hedley_Lammar

With young people overwhelmingly wanting to stay the question isnt when will the UK asks to be let back in, its when.


Scotland and others may have left by then and already rejoined. Leaving Britain alone


They better hope it isnt like Georgia Tech asking to rejoin the SEC. They might be told they arent wanted.

RafeHollister
RafeHollister

@Hedley_Lammar Better to be not wanted, than forced to rejoin something you don't wish to join.  Maybe the EU needs a Lincoln to step forward and force them back into line.  

Hedley_Lammar
Hedley_Lammar

@RafeHollister @Hedley_Lammar But that is just it.


Young people there want to be a part of the EU. It isnt even close.


Eventually they will get their way. Father time and all.


The most selfish generation ( your generation, baby boomers ) will die off soon. 

RafeHollister
RafeHollister

@Hedley_Lammar @RafeHollister the young were the ones googling "what is the EU".  They don't even know what they voted for.  Give'em time and they will learn that Freedom/Liberty trumps all other desires.

Lil_Barry_Bailout
Lil_Barry_Bailout

The EU has been pretty hostile to US businesses, so anything that weakens it is a good thing.

lvg
lvg

Excellent and informative article. Both Donald and Putin had a very good day today. Real loss for Obama.Trump's  infomercial  from Scotland  was just coincidence?He and Boris Johnson would make a good pair of anarchists and demagogues with limited diplomatic skills.

Good time to visit Great Britain

Lil_Barry_Bailout
Lil_Barry_Bailout

Interesting that many markets are down 5-7%.

With the notable exception of the UK's market, down 2%.

Kyle_Wingfield
Kyle_Wingfield moderator

@Nick_Danger @Lil_Barry_Bailout On all these numbers, let's see how they look in a week or a month. Probably a good thing there was only one trading day after the vote, and then a weekend for everyone to calm down.

Lil_Barry_Bailout
Lil_Barry_Bailout

So this is Britain's version of "hope and change"...no understanding issues or even basic mental competence required?

RafeHollister
RafeHollister

@jhgm63 Who does Google searches?  That was young people, who want to remain in something they don't know anything about.  Uninformed voters are the bane of democracy.  


Why is youth wasted on the young, someone once said.

ATLAquarius
ATLAquarius

It will be interesting to see just how much regulation and immigration truly get rolled back in Britain. Along with who emerges in the elections in October. You are correct in that no one knows what the end result will be and will likely fall somewhere in the middle of the extremes. It's hard to see them allowing the free movement of people that the EU demanded after immigration was thoroughly exploited by the Leave crowd. The big difference between here and there is the religious litmus test here which may or may not be turning off people.

RafeHollister
RafeHollister

Unchecked and indiscriminate immigration killed the EU; hopefully USA citizens are taking note.

 I think other countries will follow Britain, as sanity returns and these countries realize that sovereignty is the most important element of any country.  Being able to control their own destiny overrules any economic advantage obtained by socializing their governments.:


It was a bad day for the elites, globalist, George Soros and his open borders crowd, but they will be back.  They will emphasize every small problem Britain encounters as they try to regain their sovereignty and the lap dog bought and paid for media will feign total dismay at the "poor" decision, independent, liberty loving UK citizens made. 

ByteMe
ByteMe

By the way, this was a referendum and non-binding.  So if over the next two years, conditions change and the agreements that EU is willing to negotiate aren't in the best interest of England, they might change their minds and vote to stay.

We live in "interesting" times.

Kyle_Wingfield
Kyle_Wingfield moderator

@ByteMe Always the chance, too, that new elections are called amid a raft of bad news out of the negotiations, Labour runs on staying in, wins the elections and "pauses" the discussions.

I don't think that will happen, but who knows?

Kyle_Wingfield
Kyle_Wingfield moderator

@Lil_Barry_Bailout @ByteMe The U.K. has been in the EU for 43 years. The 50+ crowd, and especially the 65+ crowd, would be the only ones who remember what it was like.

OTOH, those of us who have read about the time they remember are given the impression it pretty much sucked, although for reasons unrelated to the EU ...

Kyle_Wingfield
Kyle_Wingfield moderator

@JohnnyReb Some people just prefer the devil they know.

One thing I know about the morning after Brexit is there's way more condescension from both sides than is warranted. This wasn't a no-brainer either way, or else it wouldn't have been so close.

RoadScholar
RoadScholar

"To a large extent, it’s the bureaucrats who are in charge. "

Because of the repub "Take no prisoners" insistence over not negotiating and the constant undermining of our President!


Interesting parallel: About ten years ago (or more) the countries in the EU wanted to "unite" the stellar engineering school in each country into a "conference". All countries nominated and appointed their best engineering school  to this conference. A few years later Great Britain wanted out. The EU contacted GT to see if they would be interested in joining which would expand GT's presence  in Europe (they already had a French campus). The EU wanted an English speaking representation in the "conference". GB dropped out and Tech joined...which provides Tech engineering students with additional options to study abroad. This isn't the first action GB has taken to :Take their country back"!

MarkVV
MarkVV

Americans do not like it when Europeans give opinions and advice about how we run our country. They should remember that when events like this referendum happen in Europe.