Europe is now embarking on a period of greater instability and corresponding weakness as the EU faces negotiations and the fallout from this referendum, both in terms of what it means with regard to the UK’s changing status towards the EU and the impact on the remaining countries, says Krista Westerlund.
It began with a “shot heard around the world” according to Ralph Waldo Emerson. Thus began the American Revolutionary War as a battle for independence from Great Britain. Yesterday, the United Kingdom took to the ballot box to declare its own independence from the European Union. A country with a long imperial history of involving itself in the affairs of countries throughout the world has complained that it has ceded too much authority to Brussels. Peace, prosperity and security be damned, Great Britain wants home rule.
Until its actions yesterday, the UK was in a truly enviable global position as an economic power built largely upon admiration of its fine qualities and its international influence both near and far. Frankly, it punched above its weight and attracted admirers with such force that London is a global financial center that has been at the epicenter of world affairs for so long with an emphasis on commerce but also a corresponding influence in political affairs as well.
Yesterday, the majority of England and Wales in particular, told the EU where to go and as a result destroyed the UK’s international credibility as a stable, vibrant and cosmopolitan society with a wide reach both into Europe and the broader world. If Britain was a transatlantic bridge, that bridge has just been burned.
What are the implications of this radical decision to choose isolationist nationalism?
The European region was already struggling with debt crises, an influx of migration and political instability. Clearly, it is now embarking on a period of greater instability and corresponding weakness as the EU faces negotiations and the fallout from this referendum, both in terms of what it means with regard to the UK’s changing status towards the EU and the impact on the remaining countries.
Europe’s loss is others’ gain. As much as I wanted to see the UK remain in the EU as a source of benefit for the greater good, as an American, this feels strange to watch. At least until November, as long as the US manages to avoid its own potential slide into divisive populism which is by no means guaranteed, then the US is emerging from this situation with increased relative global power.
Among its many roles, by creating an economy of scale to negotiate, the EU serves as a counterweight to the US in trade. By weakening the EU and also by choosing to “go it alone” the UK is now choosing a path of bilateral negotiation in trade deals. Ironically, this will weaken its relative significance when competing with large economies. Bilateral trade deals with the US have sometimes languished for years, this is a whole other matter, as the US Congress struggles with its own impasses, but by seeking to negotiate bilaterally, the UK will now be attempting to trade with the US in the same way that countries like South Korea and Colombia have had to. Protectionist sentiment is not limited to the UK, so sluggish negotiations are not unlikely.
Weakness in Europe is likely to embolden Russia. It remains to be seen how Vladimir Putin will react to structural unrest in Europe but expect it not to be with disappointment.
Europe’s prosperity and influence in the Post-Cold War era has been because of the EU.
The great appeal which generated interest in Europe making it a halcyonic beacon of freedom, justice and tolerance is because of the role that the EU plays in making Europe into a coherent bloc where the sum strengthens its parts. Sometimes as we have seen with Greece, there are significant costs and great efforts need to be exerted in order to maintain the integrity of broader political institutions. The task of maintaining stability is not without its costs. This is something that those who voted for Brexit yesterday failed to understand.
Yesterday, the majority of British voters said that they want to “go it alone”. This means that the strong economies of Asia and the recovering US are only going to increase in influence and strength. By voting for irrelevance, the UK calls into question why it should be at the center of any kind of major business and finance. After all, it no longer wants to be a bright star shining as a major member of the EU. It wants to be like Switzerland.
For those of us on the outside looking into Europe, why shouldn’t we just do business in Switzerland? Or why should we not view Germany as an even stronger voice for Europe and the regional economy? Why should we not turn our attention more strongly to other countries in the region or also to other trading regions for investment? Britain has just made the trend of looking away from Europe for future growth more appealing. It is something that did not have to happen and I am sure that attempts will be made to heal the damage of this act, but the shot was fired.
As we watch the after-effects of this historic decision, much uncertainty is upon us. Despite the unwise course of this short-sighted decision, the world will move forward. Much may change, perhaps not all of it as drastically as we anticipate. The UK may very well see some gains in its export market, but truthfully, its government could have focused on economic growth and regional development without fixating on Europe as a scapegoat and listening to reactionary, xenophobic fear mongerers. None of this was necessary.
Featured image : Copyright: Ju1978