With the EU in dire straits, it looks smart to leave altogether. But in the long run, this choice could heavely affect Britain’s prosperity and cohesion. After the German elections in September, Europe needs to reinvent itself.
While Asia is pondering the consequences of the uncertain summit between American president Donald Trump and his Chinese fellow Xi Jinping, the old Continent is concentrated on something else. On March 29th, the British government has filed the formal application to exit the European Union.
London has two years to discuss with the EU the terms of departure. During these two years, there might also be new proposals and new opinions in Great Britain, and eventually Brexit might never happen. But this eventuality now seems very far away.
When speaking about the European Union in these days, we are missing the main reason for its birth at the end of WW2, that is the United States. The push for a more unified continent didn’t come from Europe itself, it came from America.
The US did it for two reasons: to put an end to hundreds of years of wars in Europe and bring peace to the old content; and to put a stop to the advancing Soviet Union in Europe, setting military and economic boundaries against communism. After 70 years, this strong American support has faded, and for the first time in decades the US is against the EU.
This is extremely important for Great Britain also because of what happened at the end of WW2. The UK was the only European country that could claim to have won the war. Germany and Italy of course lost. France won, but only after it had been liberated by the Americans and the British, and after being occupied by the Germans. So Great Britain had actually plenty of reasons to feel part and yet not part of this Europe.
This ambiguity was in fact the historical function that Britain had played for a long time. For centuries, London managed to prevent unification of continental Europe and foiled the dominance of one European country over all the continent. In its old policies of divide and conquer, it managed to become a great global power. England, after the 17th century, in many ways played in Europe the role that Venice had played in Italy during the Renaissance period. Similarly, Venice had successfully set one Italian power against another, and thus thwarted the emergence of a strong Italian unified power. Venice was also geographically not central in Italy, unlike Naples, Rome, Florence or Milan.
However, in the 1980s and 1990s, a strong centripetal force emerged in the continent around France and Germany. The economic muscle of these two countries, together with the rest of the continent in commercial agreement with Paris and Bonn, was tantamount to the economic might of the United States. Again the US played a crucial role in this growth. It defended Europe going to war in the Balkans and thus averted fissions in the EU, as different European countries sided with different splinters of (then) Yugoslavia. In return, it pushed for the EU extension to former Soviet vassals and fully accepted the new reality of the euro. Britain thus was safe to join into this Europe as the most loyal pro American member – in the Union, but not in the eurozone.
After the recent financial crisis, things got more confused. On the one hand, the US economy was losing steam; on the other hand, Europe failed to address in a proper way all the national crises that started erupting, beginning from Greece around 2010. These crises are still there and the economic divergence between Germany and other European countries has been growing. Greece is still largely fluid, although under control, yet larger problems with Italy are looming. France is uncertain about its political future, while in Germany, the leadership of Angela Merkel might be approaching an end.
With so many uncertainties and without the support of the United States (crucial so far for European integration), it looks like a safe bet to London to leave the European Union. If in one year things improve in Europe and get worse for US president Donald Trump, Britain will have time to reconsider its options. Otherwise, if things worsen in Europe, Theresa May will have shown to Europe and the world her foresight.
However, more than betting on the most likely scenario in one year, England should maybe ask itself what kind of future it envisions in 20 years or 50 years. One likely scenario in the next 20 years is that no matter what, super states will be emerging and will be conquering new spaces in the world. Even if China’s economy were to slow down, its rise has triggered the parallel upsurge of other countries: India (1.2bn people), Indonesia (300m), Bangladesh (200m), Vietnam (100m), Nigeria, Brazil, and so on.
In this world, the size of England or of any other single European country is just too small to matter really, and here in a way Asia is also a laboratory of the future. If we look at the destiny of small countries in Asia we see how difficult is for them to move between great powers. Taiwan is torn between China, America, Japan, and is shuffling between one another. Smaller countries have even harder times. Malaysia and Singapore have to try to accommodate the wishes of many powers and are losing appeal on their own.
Therefore the question is what kind of future does England want for itself? Does it want to be part of a possible confederate European Union? Or does it want to become some kind of Malaysia?
The United Kingdom is the legacy of four nations which still claim some kind of independence from one another: the English, the Northern Irish, the Welsh and the Scottish. These nationalist drives were smothered by the dreams of the European Union. Without the EU, if England is looking after its own self-interest, then Scotland, Northern Ireland, Wales might do too. Maybe in the future, even parts of England might wish to leave the UK, with London joining the Union. These scenarios are not so unreal, because the Scots are already threatening to hold a referendum and leave the union with London. Therefore Theresa May might be right in the next one or two years, buti in the long term England might be far worse off.
Then there are the short term costs. Even if one wants to be cavalier about all the costs of renegotiating many deals with Brussels, there is the bigger question of: what will UK live off? In reality, Britain’s great industry is the financial industry now, because most of European financial transactions now happen in London. But if London leaves the union, there will be no reason for Europe to leave its financial heart out. In fact there is every reason for Europe to take all the financial transactions back to continental Europe. In this case, what will London do? It will not be the financial center of Europe. It is highly unlikely it will be a financial center in any way because business will cross the channel. Moreover, if Europe wants to remain a union it needs to be “vindictive” and scare any other member from following the British example.
So what will England do? There is no answer to that. Britain is no longer an industrial country. Many foreign brands produce in Britain to export to Europe. If London leaves the union, so goes its appeal. The only things it will still produce are education (with Oxbridge and all the top tier universities) and excellent press, with papers like the Economist, the Financial Times, the Times, and with the BBC. But even these can hardly hold up a country.
Lastly, the world has changed. The best example is China, which embraced modernization (i.e. westernization) and more recently plunged into the One Belt One Road initiative, a historic drive to push westwards towards to Europe. Israel is another example, having renewed an ancient legacy in a totally different context. Both China and Israel took an example from the United States, a new country which translated the European experience into a new context.
In many ways, the European Union was thought at the beginning as a new kind of United States with American ideas replanted in Europe. If Europeans and Great Britain renounce this project, they will go back to their old selves. Certainly the challenge is enormous, but perhaps London might try to find a way to navigate new and old, recent tactical gains and the new future bold ideas.
At the same time, Brexit is a challenge for the rest of the EU. The Union can’t exist or resist without the full support of the US. Therefore if the EU has to survive Brexit, it needs to deeply reform itself and negotiate its role and future destiny with Washington. This transatlantic link is in its political DNA, without it the EU doesn’t become a monster, it simply stops to exist. This monumental task rests on Berlin’s shoulders, the virtual EU capital, and the talks can only occur after the German elections in September. Then the new chancellor will have a de facto clear mandate to reform the union.
This negotiation is bound to have a massive impact also on the rest of the world and on China, that followed the EU with so much attention since its birth. Beijing launched its revolutionary One Belt One Road towards the Old Continent, a bold idea about reshaping Eurasia. Europe needs also new ideas.
