By Mitch Yoshida, Mayme and Herb Frank Research Fellow
After three and a half years of waiting and months of intense campaigning, on June 23rd the British electorate voted, 52% to 48%, to leave the European Union. Concerns about immigration, sovereignty, the democratic accountability of the EU, and the economy merged into a narrative that led to this unprecedented outcome. The decision is potentially catastrophic for Britain, the European Union, and the United States, which have pursued deeper and wider integration as a means to successfully addressing common economic, security, and political challenges for more than 70 years.
The degree of damage will, to a large extent, hinge on the policy responses of these actors. Looking ahead, several open questions are central to assessing Brexit’s full impact on the Euro-Atlantic area:
1. Will they manage the economic fallout effectively? The sudden psychological impact of the Brexit vote is likely to roil markets across the Euro-Atlantic area and beyond. Eurozone governments, especially those in the already-fragile periphery of the common currency area, are particularly vulnerable. Will they be able to cope with the shock?
2. What is the timeline for withdrawal? A closely related question is when Britain will actually leave the EU. Under Article 50 of the Lisbon Treaty, this will hinge on the willingness of the European Council and the British government to conclude an agreement on withdrawal arrangements and future relations. Earlier today, Prime Minister David Cameron said that his successor, who he expects to assume office in October, will trigger this process. From that point, the wait could be as long as two years or more.
3. Will the EU move toward deeper integration, disintegration, or maintain the status quo? A recent survey conducted before the Brexit vote found that a majority in France, and pluralities in Germany, Spain and Sweden, wanted their own membership referenda. The Brexit vote is likely to strengthen these calls, but it is not clear that they will be heeded by their governments. Another, though currently less likely, possibility is that the remaining EU member states will forge a more tightly knit union that is capable of dealing with internal and external challenges.
4. How will Brexit affect U.S. relations with Britain and the EU? The U.S. has long turned to Britain as a facilitator of, or “bridge” to, cooperation with the continent – an important aspect of the “special relationship.” Will the U.S. instead turn to Germany and/or France as some analysts have suggested? While President Obama and officials in his administration repeatedly expressed their opposition to Brexit and stated that the Transatlantic Trade and Investment Partnership (TTIP) would take precedence over a new trade agreement with Britain, it is not clear that this position will be adopted by the next administration.
What can be said with a high degree of certainty at this point is that shared sovereignty, a key normative underpinning of the postwar European and transatlantic orders, and the broader liberal international order that the U.S. and Europe have upheld, is coming undone. This bedrock norm underpinned the formation of systemically important multilateral agreements and institutions, including NATO, the European Economic Community, the General Agreement on Tariffs and Trade, and successor organizations. It underwrote decades of rapid economic growth, stable governments, and effective military deterrence, and transformed the West into a zone of stability whose magnetic appeal continues to draw additional states into its orbit. It is an omnipresent yet largely unspoken basis for today’s liberal international order, which has so far managed to peacefully integrate rising powers. Brexit, and the renationalization of political life across the Euro-Atlantic area, place these achievements at risk.
What can be done?
This fundamental challenge requires substantial effort, at the highest political level, to counter absolutist conceptions of the national interest and reaffirm the merits of shared sovereignty. For the EU, successfully addressing the internal and external challenges of the day – mass migration, high rates of unemployment, slow economic growth, energy insecurity, a monetary union that is still highly vulnerable to economic shocks, and an arc of instability stretching from North Africa to Eastern and Northern Europe – requires nothing less than deeper integration in the form of a fiscal union of the Eurozone, a unified approach to energy security and migration, and greater democratic accountability in Brussels.
In the U.S., a reaffirmation of the indivisible character of Euro-Atlantic security and economic interests is needed to counter incipient calls for the dissolution of NATO and largely groundless opposition to past and pending trade agreements, which could come to include TTIP. Nearly 54 years ago, in his “declaration of interdependence” speech, President John F. Kennedy called on Americans to “think intercontinentally” and stressed the need to deepen the Atlantic Partnership beyond NATO for the sake of their own security and prosperity. Similar appeals are needed today.