Henry Newman is Director of Open Europe.
A huge amount of attention has rightly been focused on what Brexit could mean for the UK. But we tend to spend far less energy considering its effects for the EU. The UK has sometimes been a reluctant player in Brussels (some might even say a truculent one), but we have also had a major impact. What will the Union look like without a British Prime Minister around the table at the European Council for the first time in four and a half decades? This isn’t just about the Union Jacks coming down outside the Berlaymont building, or Nigel Farage losing his seat in the European Parliament. Britain’s exit will fundamentally shift the balance within the EU and potentially alter its future trajectory.
Some sneeringly dismiss Brexit as of limited consequence to the bloc’s future. They say that the UK is just one member leaving the Union. But, as I’ve pointed out before, the UK’s departure is the economic equivalent of the smallest 19 members heading for the exit. The Union is losing its third most populous state and a country with a huge reach internationally – from our permanent UN Security Council seat and soft power institutions such as the BBC, to our intelligence agencies, military, and global development expenditure.
At European level, although we didn’t always get our way, we made crucial contributions to the shaping of regulations for example on sectors such as aviation and financial services. Although the UK was relatively bad at projecting power inside the EU, there were British officials who reached influential positions within EU institutions, and made a significant impact.
Others will say that Britain’s absence will allow the EU to press ahead with what its always wanted to do. Perhaps. It will certainly be the case that there will be no major power challenging the dominance of France and Germany. Recently the Franco-German motor for EU reform has largely stalled, as my colleague Leopold Traugott has examined, but there’s no doubt that the two countries remain the pre-eminent continental powers. And if the engine does restart, the UK won’t be there to slam on the breaks.
For decades, smaller EU powers have relied on the UK to object to, and on occasion block, policies which they also found unacceptable. Our interests have often aligned with those of the smaller North Sea states, which are especially concerned to protect the free trading aspects of the EU. But we have also found common cause with other countries too. As one EU ambassador in London put it to me, his county’s biggest concern after Brexit is that they will no longer have a powerful ally around the table.
Continental countries are looking to develop new alliances and deepen existing ones. There’s already the V4 group: Poland, the Czech Republic, Slovakia and Hungary. But newer alliances may develop too – perhaps a ‘Hanseatic League 2.0’ will coalesce around Holland’s Mark Rutte, with Ireland, Sweden, Denmark, Finland, Estonia, Latvia and Lithuania working together as a counter-balance to France and Germany. There’s also the ‘Club Med’ countries of Southern Europe, as well as countries such as Austria, which are willing to work with different groupings depending on the issue.
But more significant than the exact groups that develop is the question of the direction of the EU itself. Will the union continue to advocate free trade and removing barriers across its internal market and in its trade beyond, or will it take a more protectionist position? Will the EU win greater powers over defence, security and foreign policy? How quickly will expansion into the Balkans proceed? What about its financing? Without the UK’s financial contributions, the EU will either have to ask members to pay more or do less. Both are unpalatable options which will need to be addressed during the next budgetary period, just as countries shift from being net recipients of EU funds to net contributors.
The UK’s departure will also strengthen the dominance of the Eurozone over the rest, especially if more countries join the Euro (as all other than Denmark are technically obliged to do). By 2019, Poland will be the second biggest non-Eurozone economy. The gap between the Eurozone and the rest will widen if Emmanuel Macron gets his way and the Eurozone integrates further – perhaps with some sort of common budget.
The UK’s exit in April 2019 will coincide with a new cycle of European elections in May which will redraw political power in the European Parliament and other EU institutions. The collapse of the centre-left across the Continent – particularly in France, Italy and Germany – will likely mean that the second biggest group of MEPs, the Socialists and Democrats bloc, will lose seats in the upcoming elections (they will also lose the British Labour MEPs). The third biggest bloc, the ECR, will lose their largest group of MEPs – British Conservatives and their chair, the talented MEP Syed Kamall.
This will be the first election contested by Macron’s En Marche party, and it’s been suggested that his MEPs could form a new bloc replacing ALDE, the liberal group. It’s pretty certain that so-called populist parties – as well as more extreme parties on the right and left – will significantly gain ground, including for example the League in Italy, and AfD and Die Linke in Germany. It’s not yet clear into which group these MEPs will end up.
Soon after the elections a new Commission will be chosen, with the President most probably selected under the system of Spitzenkandidat, meaning that the dominant political faction in the European Parliament will gain control of the Commission. Later in 2019, there will need to be a new President of the European Council to replace Donald Tusk, as well as a President of the European Central Bank.
Without the UK around the table, life on the Continent will of course go on. But the path the EU takes is unclear. This matters for the UK at many levels. Who will gain control of the institutions with which we have to negotiate our future partnership – the Council, the Parliament and the Commission? For those who hope to reverse Brexit – what sort of Union will there be for the UK to (re)join? And for those hopeful of close cooperation in the future, what direction will the EU take without us? All of these questions have uncertain answers but if the EU changes as much in the next decade and a half as it did in the last, it will seem a very different place by 2030.