The Brexit equation: EU minus UK = ?

The Brexit equation: EU minus UK = ?

Bulletin article
22 January 2016

Brexit would change the EU as well as the UK. What kind of partner would a diminished EU be for Britain and the rest of the world?

Most discussions of the UK’s possible exit from the EU focus on what Britain would be like afterwards: whether it could trade more freely with the world, escape EU regulations and reduce immigration. Equally important, however, is what the EU would be like afterwards; and how in turn this might affect post-Brexit relations between the UK and the EU.

Former EU legal adviser Jean-Claude Piris set out seven possible models for this relationship in his recent policy brief for the CER, 'If the UK votes to leave: The seven alternatives to EU membership'. He concentrated mainly on the UK’s urgent need to have continued access to the single market.

If Britain left the EU it would have to negotiate a trade agreement with a group that had just lost one of its more economically liberal members. The gap between the laissez-faire British and the dirigiste continentals is smaller than the British imagine, as John Springford showed in ‘Will the eurozone gang up on Britain?’ But the biggest question is whether the EU would be willing to give the UK the market access it currently enjoys – and whether, over time, the market might become more closed to non-EU countries. The UK has consistently pushed for an open EU – especially in financial services, since the City of London is a global financial centre, not just a European one. Without the UK, would any other member-state resist ECB pressure to confine euro clearing to the eurozone, for example?

The centre of gravity in the EU would shift in areas other than the single market, however, including justice and home affairs (JHA), and foreign and defence policy. Though the UK is often caricatured as Europe’s perpetual nay-sayer, the reality is more nuanced. In some areas the UK has indeed been the main obstacle to European co-operation, but in others it has actively promoted it. The EU minus Britain would not automatically become the federal state that eurosceptics fear, but it might not reflect UK preferences as closely as it now does.

In the Justice and Home Affairs area, the UK’s opt-in means that it is already less than a full partner. It has, however, opted in case-by-case to important JHA measures including Europol and the European Arrest Warrant (EAW). The UK has actively employed the EAW, submitting more than a thousand requests to other member-states from 2010-14. Once outside the EU, the UK would have to negotiate a bilateral extradition agreement with the Union, or individual bilateral agreements with each of the EU’s 27 member-states. If the UK were also to reject the European Convention on Human Rights, however, as a result of the government’s proposed ‘British Bill of Rights’, would all EU member-states be able to extradite suspects to the UK? And would the European Parliament (minus UK MEPs) ratify an EU-UK agreement, or reject it on human rights grounds?

In foreign policy, the UK has frequently used EU machinery to pursue its own foreign policy objectives. In an EU without the UK, only France, as a permanent member of the UN Security Council, would have a truly global foreign and security policy outlook. If the UK wanted EU support for foreign policy initiatives, therefore, it would have to contend with a more parochial EU. Would an EU at 27 have imposed sanctions regimes on Burma (where other member-states had economic interests vulnerable to sanctions)? Or become as heavily engaged in Somalia – a UK priority before it became an EU issue? Would the UK outside the EU act unilaterally, and if so with what effect? And would the EU, having lost one of its major economic and diplomatic powers, carry the same weight with interlocutors like Iran?

The UK’s departure would also affect transatlantic relations: the EU might become a more difficult foreign policy partner for the US (forcing the US to make more efforts to cultivate other member-states). Despite continued military and intelligence links, would the US pay less attention to UK views?

In defence, the UK has sometimes been an active participant in EU operations and is a staunch defender of the need for EU defence policy to be compatible with NATO. Only Britain and France among EU member-states have full-spectrum military capabilities and a tradition of overseas deployments. Post-Brexit, France would probably continue to promote EU operations in Africa and elsewhere; but the UK would struggle to get the EU to reflect British priorities. And while the EU at 27, even more heavily influenced by Germany than it is now, would be more reluctant to conduct operations, it might be more willing to set up European structures completely outside NATO, at the risk of putting EU symbolism ahead of military effectiveness. Would the UK, which has always resisted such gestures, be able to do anything from outside the EU to prevent them?

Brexit would have important implications for the future direction of the EU, not just the UK. Eurosceptics might be right that, all things being equal, the UK would be fine outside the EU. But in reality all things will not be equal.

Ian Bond is director of foreign policy at the Centre for European Reform.