Jeremy Woolfe considers some of the many scenarios facing the UK and the EU post-Brexit
The fundamental reaction to the referendum result in Brussels appears to be one of shock. It was more or less completely unexpected. Discussion on the subject, at the previous day’s PensionsEurope annual gathering in Brussels, had been universally optimistic the Remain side would prevail.
This view was supported by the 52%-48% Remain vs Leave polls, as well as by the performance of financial markets. A mood of optimism, nervous though it might be, prevailed. It lasted until up to around an hour after midnight British time.
Then, at the no doubt one of many late-night Brussels gatherings, came the Newcastle result. Then, nail-biting and worry promptly set it. And finally, as told to IPE by think tank researcher Marco Incerti, the morning after dawned with a general feeling of sickening confusion.
And now the question – what will happen in the medium and long term? What EU leaders don’t want, Incerti reports, is long, dragged-out negotiations. Article 50 of the 2009 Lisbon Treaty, they say, should be enacted straight away.
Incerti, at the Centre for European Policy Studies (CEPS), also notes, wryly, that the referendum impact on the descending value of the pound had, already, during the first morning, resulted in the UK’s losing its status as the world’s fifth-largest economy. That honour now goes to France.
Clearly prompted by rage, one reaction to the Leave vote comes from Elmar Brok, a member of the European Parliament. Significantly, he is also president of the Union of European Federalists. The German centre-rightist recommended that EU president Jean-Claude Junker immediately remove Lord Jonathan Hill as the British commissioner for financial services. Brok was by no means alone. In fact Hill, a devoted European, announced the next day that he would stand down. Valdis Dombrovskis, the Latvian commissioner, will take his place.
But not so fast, cautions another commentator. I would not agree with Brok on Hill’s position, Zsolt Darvas tells IPE. Remember, whatever happens, the UK will remain a member of the EU for at least another two years. Perhaps, it could be “much longer”, suggests Darvas, a visiting fellow at another think tank, Bruegel.
Interestingly, Darvas, a Hungarian, goes a stride further. He would not exclude the possibility of a second referendum in the UK. This could follow a fury-driven general election later this year. He might agree that forecasts of economic calamities, such as tragic job losses, coming true, could force such a move.
Roughly on the same track, another bystander notes the young age-bracket of the Remain voters – young, virile and furious. Yet another observer, a mid-level official in the European Commission, wonders how the UK could ever square off the fact that 48% of the British voters, many with long lives ahead, did vote for Remain.
Furthermore, Darvas offers that the Leave side, being strongly powered by opposition to immigration, could mean that the UK has to stick to its guns on this issue. This would rule out any Norway/Switzerland style outcome. Leaving what other options?
And if London were to lose passporting rights, matters would be further “complicated”. A forecast of large funds having to leave the City could not be that far away.
Back to the European Parliament, another MEP, with a less strident line than Brok’s, comes from Green Party member Sven Giegold. This MEP refers to Brexit as “a historic setback for the European Union but not its end”.
However, Giegold goes on to note that, if the UK thinks it can have open access to the single market without taking on its common rules, it would be mistaken. There could be no free movement of capital for the City without free movement for citizens, he warns.
Forces leading to a tumultuous political scene emerging in the UK do seem to be piling up. Will the pandemonium lead to another election soon? If Labour campaigned to stay in the EU by refusing to trigger Article 50, the effect would be the same as a second referendum. Out of the question? Perhaps not entirely.