Ian Bond and team (Centre for European Reform)
Following the Brexit referendum, the EU will be facing significant changes. The question is whether they will be based on the February agreement between David Cameron and the EU or they will be the consequences of the United Kingdom leaving the EU. This second option would have negative repercussions for the EU institutions, from which the British point of view would disappear. Brexit could also exacerbate euroskepticism in other countries. What else could it bring along?
In the area of economy, London is associated with liberalization. In this field, however, the cabinet of David Cameron is not very active since the liberalization of the internal market is related to the free movement of labor. Therefore, Brexit would not cause major slowdown in this area – quite the opposite, it would remove some obstacles. Similarly, Brexit would not lead to changes in the formation of economic and financial policies of the EU, more concretely to the feared weakening of the influence of the countries outside the Eurozone. The current state is determined by the actual conditions, and not by David Cameron’s government activity, while a deeper integration of the Eurozone cannot be expected. However, the main opponent to the common rules on taxation, insolvency and commercial law promoted by France and the Commission would disappear.
The United Kingdom is a key player in shaping the rules against crime and terrorism. EU countries would have to pay more attention to these issues if the UK were to leave. It would be also necessary to cope with a reduced ability to fight cross-border crime. The continuity of police and judicial cooperation would involve finding alternative ways to ensure the participation of the British, who would leave both Europol and Eurojust. Brexit could also complicate the cooperation with the US in these areas. London often mediates compromise between Brussels, which emphasizes privacy, and Washington, which focuses on safety first.
In the EU foreign policy, Brexit may lead to a significant reduction in its overall activity. The British tendency to react to violations of international law or human rights, such as by the introduction of sanctions against Russia, could be replaced by pragmatism and commercial interests. The loss of the Union’s second largest economy would also weaken its position in the subsequent negotiations. The overall EU’s interest in the developments in Asia would be reduced as well and the amount of development aid to the former British colonies would be lowered. With respect to the EU’s defense policy, Britain’s non-participation could lead to the strengthening of co-operation, but at the same time also to the reduction of its capacities. Therefore, the development of the future co-operation between the Union and NATO would be crucial.
(The study can be downloaded here: http://www.cer.org.uk/publications/archive/policy-brief/2016/europe-after-brexit-unleashed-or-undone)