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Brexit has been a wake-up call about the value of European integration

The UK’s decision to leave the EU has sent shockwaves through its institutions and the member states, but there are also indications that Brexit represents more than merely the dramatic culmination of the EU’s decade of crisis, writes Maximilian Conrad (University of Iceland). The resulting pro-European backlash, witnessed both domestically and throughout the union, suggests that the referendum may indeed also be taken as a turning point, maybe most importantly as regards the ways in which political discourse makes sense of Europe.

After decades of a blame-game of predominantly Eurosceptic discourse on European integration, heavily emphasizing issues such as loss of sovereignty, democratic deficits or threats to national identity, Brexit appears to have served as a wake-up call that has reminded Europeans of the high normative as well as instrumental value of European integration. Initially, this turning point was best illustrated by the Pulse of Europe rallies that sprung up in various European cities from the summer of 2016 onwards. But the parallel rise of right-wing populism has lent particular urgency to the idea that European integration needs to be rescued from its enemies, as was especially evident in the run-up to the recent European Parliament elections in 2019.

From this vantage point, Brexit presents a peculiar conundrum to the sort of political actors that scholars of Euroscepticism would refer to as “soft” Eurosceptics. Based on a distinction introduced by the political scientists Paul Taggart and Aleks Szczerbiak, soft Eurosceptics are those who oppose the European Union in its current form, but who are not categorically against the idea of some form of European integration. Their conundrum is essentially that they have to advocate for the continued existence of the European Union, while at the same time maintaining their (however legitimate) criticism of the current EU, its ideological orientation and/or policy priorities.

This conundrum has been particularly clear in the run-up to the European Parliament elections in Germany, where European integration has become considerably more contentious in the wake of the Eurozone debt crisis, the so-called Greek bailout packages and the refugee crisis, all of which have also been contributing factors to the sudden rise (and radicalization) of the “Alternative for Germany” party from 2013 onwards. Germany is also a relevant case in point in the sense that any kind of politically relevant Euroscepticism, if it exists at all, has tended to take a very soft form. This may very well be due to an unspoken assumption that underlying all legitimate criticism of the EU is, in fact, a broader consensus on the desirability of European integration – a consensus which has however begun to crumble significantly.

The recent “One Europe for All” demonstrations – initiated by a network of soft Eurosceptic German civil-society organizations and held one week prior to the EP elections in more than 50 European cities – are a clear illustration. Our analysis of the messages communicated by the participating organizations clearly demonstrates the sense of urgency accompanying the EP elections. Despite all criticism of the EU, the organizers emphasize that the future and existence of the EU is at stake in the EP elections, as “[n]ationalists and right-wing extremists want to use them to herald the end of the EU and bring back widespread nationalism”. Far from being merely a symbolic event, the elections are therefore construed as an opportunity for citizens to vote “against nationalism and racism”, “contempt for humanity and racism” and “for a democratic, peaceful and united Europe”. Maybe most importantly, the elections are framed as an opportunity for choosing the future direction of European integration, emphasizing the importance of a “vision of a different Europe” that entails “humanity and human rights”, “democracy, diversity and freedom of expression”, “social justice” as well as “fundamental ecological change and solving the climate crisis”, all of which the EU is alleged to have failed to achieve so far.

Our analysis of the messages communicated by the participating organizations points to three important findings. First, we can observe what might be referred to as a discursive reclaiming of the European project. What is at stake in the elections is nothing short of “our Europe”, which is currently at risk of being taken hostage by right-wing forces that threaten not only its historic achievements, but indeed its very existence. This must not be misread as any sort of uncritical approval of the status quo in today’s EU. Nonetheless, it does clearly spell out a sense of citizens’ ownership of – and responsibility for – the European project. In most cases, this is also accompanied by a specific vision of how the EU should change in order to become e.g. “a Europe of human rights and democracy” or “a community in which the individual, not the economy, is at the centre of attention.”

The second key finding is that at least some of the participating organizations maintain their strongly confrontational position towards the EU. These are arguably the ones who have been most critical of the presumably neoliberal orientation of the EU in its current form, such as most notably Attac. In fact, Attac goes as far as blaming the EU’s neoliberal orientation as at least one important root cause of the recent surge of right-wing populism. But even organizations that consider themselves to be decidedly pro-EU, such as Mehr Demokratie, speak of an “ever more nontransparent and centralist EU” and call for a democratic restart of the union.

The third key finding is that in the face of the EU’s existential crisis, a more explicit and unambiguous commitment to European integration is now expressed by organizations that had previously been critical of the EU’s alleged lack of ambition in areas such as environmental or social standards. As a case in point, Friends of the Earth Germany, which had been a vocal part in the campaign against TTIP and CETA, now emphasizes the necessity of a deepening of European integration as a “core requirement for an effective fight against today’s environmental problems”.

We can conclude that the Brexit context has, in fact, had a moderating effect on EU contestation in Germany in the run-up to the 2019 European Parliament elections. Most of all, it has created an apparent need for soft Eurosceptic actors to spell out more explicitly and unambiguously that their legitimate criticism of specific aspects of the current EU must not undermine the project of European integration as a whole. However, with a view to the development of a new narrative for Europe, the contentious claims raised in connection with the “One Europe for All” demonstrations should, by all means, be taken seriously.

This post represents the views of the author and not those of the Brexit blog, nor the LSE. Image: C00 Public Domain.

Maximilian Conrad is Professor of Political Science at the University of Iceland in Reykjavík. His work includes the monograph Europeans and the Public Sphere: Communication without Community? (Ibidem Press, 2014) and the volume Bridging the Gap? Opportunities and Constraints of the European Citizens’ Initiative (Nomos, 2016).

Both Northern Ireland and the UK will suffer at least 3-4 % reduction in GDP per year for a decade as a consequence of Brexit

Of pressing concern is how Brexit will affect Northern Ireland in terms of trade, freedom of movement of persons, foreign direct investment, and loss of European Union funding.  In this blog, M. Leann Brown argues that evidence suggests that NI and the United Kingdom will ultimately suffer at minimum a 3-4 per cent reduction in GDP per year for a decade as a consequence of Brexit (EU Exit Analysis, 2018).

While states withdrew fairly frequently from regional economic organizations during the “first wave of regionalism” (the 1950s-late 1970s), very little literature provides theoretical guidance as to how to think about the consequences of states’ seceding from regional economic organizations. The EU is so unique and advanced in economic and political integration, there are no comparable cases to draw upon to build or test a theory of member state secession.

Economists’ predictions regarding the potential effects on GDP range from +2 to 20 per cent in some sectors like agriculture. These predictions vary by the models and timelines employed as well as by the analysts’ ideology. However, it is clear that NI will suffer economically more than the rest of the UK, save perhaps the Northeast and West Midlands. Trade will be negatively affected although perhaps more slowly than might be expected. FDI will be more immediately affected by the loss of the 500 potential consumers in the Single Market and the uncertainties associated with these processes.  Various forms of EU funding will cease, and although Britain has committed to compensate NI for some of these losses, its willingness to meet these obligations will undoubtedly be affected by the negative economic fallout Britain itself suffers.

Trade

With or without a bilateral trade agreement, leaving the EU Single Market will negatively impact NI’s trade. In 2017, 56 per cent of NI’s exports worth £8.7 billion went to EU member states. The Republic of Ireland is NI’s number one destination for exports; the value of those exports in 2017 was £2.7 billion (Polley and Hoey 2017). As a member of the Single Market, no tariffs are levied on NI exports to EU member states.  Under the worst case scenario, the EU would treat imports from NI under third country import rules, i.e. they would subject to tariffs and quotas. That would translate, for example, into about a 3.2 per cent tariff on agricultural goods, undermining those exports’ competitiveness.

Post-Brexit, the UK itself might introduce import tariffs or other nontariff barriers like customs controls which would increase costs for NI importers and consumers. However, the UK could reduce or remove regulations and other barriers on third country imports, for example on agricultural or food products.

In negotiations, both the EU and UK have said that they wish to avoid the worst-case scenario regarding loss of access to the Single Market. Analysts have speculated that Britain’s post-Brexit relationship with the EU might follow Norwegian or Swiss models of having access to the Single Market. For example, Norway is a member of the European Economic Area and has adopted 3/5 of the EU’s acquis communautaire. Both Norway and Switzerland are expected to contribute to the EU’s structural and cohesion funds, but lack the ability to participate in EU decision making. After recent negotiations, the EU and the UK have announced that they will avoid the negative trade consequences of leaving the Single Market, but Theresa May said that the new relationship would not be like the Norwegian, Swiss or Canadian relationships, which means that at this point we have no sense of post-Brexit trade relationships.

The border

In addition to trade, the status of the border is fraught with concerns relating to freedom of movement of persons; these concerns are usually discussed in terms of whether there will be a “hard” or “soft border” between NI and the Republic after Brexit. A combination of the 1952 Ireland-UK creation of a Common Travel Area, the creation of the EU Single Market in 1987, and the 1998 demilitarization of the border after the Good Friday Agreement has meant that recently there has been freedom of movement across the border.  Approximately 30,000 people live and work across the border, who would be inconvenienced by reestablishment of border controls. Some suburbs of Derry/Londonderry effectively sprawl across the border (Bell 2016).

Freedom of movement

About 7 per cent of the workforce in NI is from EU countries – Poland, but also Latvia, Lithuania, Portugal.  If there is no control at the borders, EU immigrants seeking work in the UK could cross the Republic-NI border without being challenged. Immigration control was a major issue in the Brexit referendum. The Republic has already identified 250 sites that will require personnel if a hard border is established after Brexit.

Everyone is aware of the political sensitivity of the border. Theresa May said from the outset that the UK aspires to a “seamless” or “frictionless border.” This issue remains unresolved. Questions include where will the border lie – between NI and the Republic or between the island and the UK? What form will the new border controls assume? Could new technologies such as use of vehicular number plate recognition technologies and drones help soften the border?  Most scholars believe that it will be impossible to avoid the reestablishment of some kind of border controls in the wake of Brexit.

Foreign direct investment

The primary question with regard to FDI, is the extent to which NI’s attractiveness as a destination for FDI will be affected by its loss of access to the Single Market. The economic uncertainties associated with Brexit will heighten perceived risk, affecting indigenous and foreign investment, particularly in sectors like agriculture and manufacturing that are closely associated with EU trade. There are already significant disincentives for foreign firms to invest in NI – relatively low productivity rates, a weak private sector, and corresponding strong dependence on public funding, its peripheral location and rurality.

Much discussion has centred around whether a lowering of the corporate income tax could offset the negative effects of Brexit for NI. The NI government has been granted the right to put into place a local corporate tax rate to make the region competitive with the Republic’s 12.5%. Of course at this time without a government, the lowering of the corporate income tax is on hold. Most analysts concur that a lower tax rate will not compensate for the loss of potential FDI’s access to the Single Market and the several years of uncertainties will greatly compound existing deterrents to DFI for NI.

Loss of EU funding

Given that conflict resolution figured prominently among the EU’s original missions, it has devoted significant resources to conflict amelioration in NI. A European Policy Coordination Unit was established within the Office of the First and Deputy First Minister and an Office for the NI Executive was established in Brussels in 2001. The EU created a Northern Ireland Taskforce after the re-establishment of power-sharing in 2007. Overtime, the NI Taskforce has interacted with 17 Directorate Generals, the first time the Commission has established such close relationships with a single region over so many areas. Three MPs represent NI in the European Parliament.

The EU has provided billions of euros in funding to support NI under several programs, likely £11 billion since 1984 (EU Funding Allocations).  The monies have been available for infrastructure projects, business sectors, and political reconciliation projects. The various PEACE projects are very sophisticated, featuring “peace-building from below” strategies that promote cross-border, inter-cultural dialogue. Examples include inter-cultural daycare centres, programs supporting discussion of history and storytelling, and cross-border musical events (Phinnemore et al. 2012).

The sector likely to suffer the most from loss of EU funding is agriculture. Between 2005-2014, NI farmers received £2.5 billion from the Common Agricultural Policy, representing approximately 87 per cent of farm income. Agriculture accounts for about 38,000 jobs, 3.3 per cent of civil employment in NI. Another sector likely to suffer is civil society that employs 4 per cent of the total workforce. Loss of EU funding will translate into loss of jobs in this sector, particularly among women (Miller 2013).

Again, the UK has promised to match the current level of EU spending in these sectors through 2020, but what will happen after that is unclear.  Agriculture is among the sectors devolved to regional responsibility.

So to reiterate, evidence suggests that it is likely that both the UK and NI will suffer annually at minimum 3-4 per cent reduction in GDP, respectively, as a consequence of Brexit. A loss of 4 per cent GDP in NI will throw an economy not yet fully recovered from the Great Recession into negative growth for a decade. These could be very uncertain and painful times in NI.

This post represents the views of the author and not those of the Brexit blog, nor the LSE. Image by .holger licenced under Creative Commons Attribution-Share Alike 4.0 International.

M. Leann Brown retired after thirty years in the classroom of the University of Florida in May 2018.  Her most recent publication is REGIONAL ECONOMIC ORGANIZATIONS AND CONVENTIONAL SECURITY CHALLENGES (Palgrave, 2018). Her current research focuses on how states’ identities affect foreign policymaking.

Global Britain? Replacing the EU with the Commonwealth is fanciful

Replacing participation in the European Union with enhanced cooperation at the Commonwealth is not a viable option for the United Kingdom, writes Rishi Gulati (LSE). It is a triumph of hope over reality. This much is made clear by a leaked document from the Commonwealth reported on by the BBC on 13 June 2019 demonstrating that the institution needs significant and systemic reforms which I argue are almost impossible to implement in the near future.

On 11 March 2018, Britain’s likely future Prime Minister, Boris Johnson, in an article titled ‘Commonwealth has key role to play in the bright future for Brexit Britain’, wrote:

As Her Majesty and Prince Philip drove from Entebbe Airport to the capital, Kampala, they were greeted by cheering crowds lining every inch of the 20-mile route. I cannot imagine any head of state except the Queen – or any international organisation except the Commonwealth – stirring such popular enthusiasm…As we celebrate Commonwealth Day tomorrow, the Commonwealth’s 53 members comprise a third of humanity. Of those 2.4 billion people spread across six continents, 60 per cent are under the age of 30. They are joined with us by ties of history and friendship and the English language. They share our values of democracy, human rights and the rule of law. And our natural affinity finds its expression through the institution of the Commonwealth.

The Commonwealth is, of course, an important institution and ought to be strengthened. However, for trade deals to be concluded, security cooperation to be strengthened, and other global challenges such as climate change to be combatted successfully, one needs more than cheering crowds. What is needed is distinguishing between tabloid-emotion and the real action that needs to be taken by states to achieve those objectives by cooperating with each other. One of the established ways to enable such international cooperation is through international organisations. The European Union (a supranational institution) is just one example of the more than roughly 400 international organisations that exist today.

A somewhat lesser known international institution is The Commonwealth. The Commonwealth consists of 53 member states mostly comprising of former British colonies that are at various stages of development. Its roots thus go back to the British Empire. It is headquartered in London performing its work through the Commonwealth Secretariat which was created in 1965.

The idea of replacing participation in the EU with the Commonwealth has two possible dimensions: an economic and an institutional dimension. Other commentators have already noted that the economic case for replacing the EU with the Commonwealth simply does not exist.

The project of expanding trade with the Commonwealth is not an irrational or ignoble one. But the belief that this can compensate for frayed links with Europe is a delusion. The government’s own analysis suggests that the UK would lose between 2 per cent and 8 per cent of GDP over 15 years from a “hard Brexit” (withdrawal from the single market and the customs union), while new trade deals with the US and others would add no more than 0.6 per cent.

One should have similar doubts as to the institutional case for replacing participation in the EU with the Commonwealth. There are in fact such institutional deficiencies prevailing at the Commonwealth that it is incapable of replacing the EU as a viable institution to secure deep and meaningful international cooperation. To start with, the aim of the institution is a modest one. According to the Commonwealth’s constituent instrument – The Revised Agreed Memorandum on the establishment and functions of the Commonwealth Secretariat 2005, it is an institution merely intended to play ‘a constructive role…At the same time it should operate initially on a modest footing; and its staff and functions should be left to expand pragmatically in the light of experience, subject always to the approval of Governments’ (Article 7).

What is more, compared to several other institutions, the Commonwealth’s constituent instruments lack specificity. The organisation pursues broad goals with modest resources and limited powers. The broadly framed priority areas pursued by the Commonwealth currently include: Economic, Youth and Sustainable Development; Governance and Peace; and Trade, Oceans and Natural Resources.

Crucially, to achieve its objectives, the institution of the Commonwealth must work efficiently, effectively and in an accountable manner. This, however, does not seem to be the case. Alarmingly, on 13 June 2019, a BBC report noted that: ‘The Commonwealth Secretariat, the body that manages the international organisation in London, is in “urgent need” of reform, according to a leaked internal report obtained by the BBC.’ Serious policy, legal, financial and operational challenges exist for the Commonwealth – as the report went on to note:

there are “deep concerns” about the governance structures of the secretariat which “lacks clarity” in its priorities and needs to be “more transparent and accountable”…Some diplomats have also argued for an independent inquiry into the financial and reputational implications of two recent employment tribunals – one involving Lady Scotland’s deputy – that the secretariat lost and could result in legal bills of more than £1m…

Whe heads of government elected Lady Scotland in 2015, they instructed her to review the way the secretariat was being run. Three years later, she established a so-called ‘high level group’ of mostly former Commonwealth foreign ministers whose report last autumn was never published. It concluded there was “an urgent need” for the governance structure of the secretariat to be reformed”; there is a serious and urgent need to place the funding of the secretariat on a more stable and predictable footing” – In recent years, some member states have been less willing to give the organisation money. Its core budget has now sunk to just £32m, down from £52m in 2012/13. Such are the financial pressures that the secretariat has decided to break the lease on a building it rents in Pall Mall called “Commonwealth House” that was opened by the Queen only in 2016.

If the Commonwealth is to achieve its aims, not only urgent reforms to the Commonwealth’s governance framework need to be made, including a very significant boost in funding, but consideration needs to be given to enhance the Commonwealth’s mandate which is currently broad and vague. However, it should be noted that implementing substantive reforms to international organisations generally, and the Commonwealth specifically is almost an impossible task in the current environment where international institutions (including the EU and WTO) have come under sustained attack.

In addition to the above institutional shortcomings in the Commonwealth’s governance, there are further structural issues challenging the efficiency of the organisation. One of the thorny issues is the transformed power balance amongst the Commonwealth states. This includes especially the rise of India. Further, some very significant tensions between certain member states of the Commonwealth exist. For example, there is tension between India and Pakistan (which has led to several international armed conflicts), and between the UK and Mauritius (see the Chagos Advisory Opinion of the International Court of Justice where it concluded that ‘the process of decolonization of Mauritius was not lawfully completed when that country acceded to independence’ and that ‘the United Kingdom is under an obligation to bring to an end its administration of the Chagos Archipelago as rapidly as possible’ also see a recent UN General Assembly Resolution demanding that the United Kingdom unconditionally withdraw its colonial administration from the area within six months). This makes it improbable that the Commonwealth as an institution will be able to achieve the kind of consensus building and cooperation required amongst member states to effectively and comprehensively pursue its agenda.

The idea that securing effective and meaningful state-to-state cooperation through the Commonwealth will fully or partially substitute the kind of cooperation secured through the relatively robust institutions of the European Union is a triumph of hope over reality. The BBC report of 13 June 2019 only goes to show that that the Commonwealth may not be the vehicle that the UK can charter anytime in the near future to become the outward-looking global Britain that many want it to be. A future where the Commonwealth is proposed as a realistic substitute to the EU is a venture into the great unknown. Crucially though, the assumption that deeper engagement with the Commonwealth and remaining in the EU are mutually exclusive things is completely wrong. Both those institutions play their own particular roles, having distinct functions, and have significantly different membership, with the Commonwealth only having three European states including the United Kingdom as its member. One can walk and chew gum at the same time.

This post represents the views of the author and not the Brexit blog, nor the LSE. Image by the FCOSome rights reserved.

Dr Rishi Gulati is LSE Fellow in Law, and a Barrister, Victorian Bar. 

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