The EU’s reaction following the UK’s Brexit referendum is confirming the dirty little secret rarely discussed in Brussels for obvious reasons — should the UK-EU divorce proceed in earnest, the UK may well have the upper hand.
The Mafia-like behaviour of the European Commission’s officials in Brussels — telling the UK to pack its bags quickly and leave quietly while threatening the other 27 member states to ‘fall in line’ or risk retribution — is exposing their fundamental insecurity about the sustainability of the entity they have created.
Think about it: a centralised governance regime that began as a six-country organisation in 1957 has become a superstructure in which 24 languages are officially recognised and comprised of 28 separate countries, many of whom — especially the more recent ascendants — have greater fundamental differences among them than they have in common. It is hardly a surprise that the ‘house that Brussels built’ ultimately would crush under its own weight.
To this end, if the UK ‘leadership’ — such as it is at the moment, in disarray — is smart, it should take the ‘high-road’, resist being pushed quickly — whether by internal or external forces — into a panic-stricken divorce settlement, and act deliberatively and decisively.
They should let the Brussels’ bureaucrats continue to muck around in the mud. That is always a losing strategy.
Indeed, there is an argument that they have more to lose from Brexit than does the UK — the fifth largest economy in the world, the globe’s leading financial centre, the location of 7 of the top 10 universities in Europe, and a voice of authority in international affairs that commands the deepest respect.
And it is currently home to 3 million non-UK, EU citizens. If the European Commission continues to go down the road on which they are embarking, that will only give greater credence to the argument.
Is it really a surprise therefore that just 10 days after the results of the Brexit referendum were announced, that Germany — which, other than France, would become “the” dominant economic player in the EU and thus worried it will be the prime target for resentment by many Euroskeptics within many of the other member-states — is now fumbling on stating its EU policy objectives?
Over the course of just one day, Finance Minister Wolfgang Schaeuble said Brexit is a wake-up call for reforms to curb the power of the European Commission and decentralise its authority; Vice Chancellor and Economy Minister, Sigmar Gabriel, called for the UK to exit the EU quickly and then went on to applaud the Greek authorities for sticking with the EU despite all the hardships Athens has been through (which, to be sure, are hardly over); and Ruediger Grube, the CEO of Deutsche Bahn, the state-owned German rail operator, said a British exit from the EU would hit demand for his business hard, sending economic ripples throughout many member-states.
The immediate task for the UK is getting its own act together. Frankly, David Cameron’s resignation as Prime Minister just hours after the votes were counted was a premature, irrational, and histrionic response. It confirmed his inability to lead under pressure, and only worsened the lot of his country.
He is the one who has sown the seeds to his own tarnished legacy.
Worse still, his design of a referendum on such a fundamental governance issue as the UK exiting the EU — arguably akin to a proposed change in a country’s constitution — on a simple majority vote rather than establishing a higher threshold, such as a two-thirds majority, and/or stipulating that a certain percentage of the population must vote for an outcome to be valid, seems derelict.
In the event, no small number of Brits who cast their vote on the ‘leave’ side have subsequently acknowledged they were simply casting a ‘protest vote’ and really did not believe there was any real chance for the outcome that in fact transpired.
Instead, the Prime Minister should have proclaimed affirmatively, “I’ve heard what the British people have voiced through this referendum and if Parliament votes to authorise me to do so, I shall work tirelessly with my counterparts in the rest of Europe to modify and modernise the terms of the EU framework such that it will benefit not just the UK but all 28 member-states”.
By doing so he would have more effectively appeased — perhaps even disarmed — his rivals at home and may well have found a fair amount of support among some other EU member-states, where there may well be a ‘silent majority’ of Euroskeptics While the referendum is politically and morally binding, it does not, in and of itself, mandate anything legally. For a member-state to duly notify Brussels that it wishes to withdraw from the EU (in technical terms, a declaration of Article 50 of the Lisbon Treaty of 2007, the most recent authorising framework governing the EU), it must be the result of a decision made by that country’s legislature or otherwise as mandated by its constitution.
Perhaps Cameron’s shoot-from-the-hip resignation was a deliberate tactic to throw the UK’s political decision-making apparatus in disarray to buy negotiating time for his country to stall the EU authorities and put pressure on Brussels to reform its grand ‘political economy experiment’. If only it were true.
The fact is that the UK is, and will continue to be, in Europe. Only 20 miles separates them. This is a geological and topographical reality — unless someone can figure out how to either transport an island to some other place on the globe or ‘time shares’ among different countries are invented!
Thus both sides will continue to have to find a way to live together. Doing otherwise is like trying to get a divorce while maintaining a single household.
No matter what happens at the institutional level, economic interests will ultimately teach the politicians that everything is negotiable. In this case, the EU — including the single-currency Eurozone monetary system, which ends up artificially constricting the reformist hands of nation-state fiscal policymakers — finally might be slimmed down, infused with a credible and achievable purpose, and run by officials that more closely represent the real interests of its members.
Who knows? In the end, the citizenry of the EU actually may want to thank the UK leadership for its misguided handling of the Brexit referendum.
The writer is CEO and Managing Partner at Proa Global Partners LLC.