Brexit and the EU’s Balance of Power: Why Do Some Hope for the Worst?

4 novembre 2016
The fact that Theresa May is depicted in several European capitals as a die-hard Eurosceptic testifies to the confusion created by the new balance of power within the EU and the eurozone. While most national bureaucracies have tended to reduce politics to the “European project” over past decades, they have actually been marginalised in the context of Germany’s new leadership. As a result of this paradox, most European governments feel that the EU’s woes fuel their own discredit at home and seem more prone to anxiety in the face of Brexit than their German counterparts.

France is a good example of this trend, as the country is simultaneously confronted with a failing economy and the decline of its political influence, despite the French elite’s traditional ambition to preside over European politics. Even if the British government were willing to scrap its red line on European immigration, for instance in order to facilitate parliamentary approval for the whole deal, some member states might still not warm up to the idea of a mutually beneficial association. Although a shift on immigration would certainly help to move the balance on the continent in favour of a soft Brexit, some government circles hold the view that a painless divorce would not only compromise the bloc’s integrity but also undermine their own political legitimacy.

It came as a surprise to most people bearing in mind the acrimonious debates over Greek bailouts that the German government took a more benign stance towards Britain after the referendum than did most other European governments. Even Wolfgang Schäuble, well known across Europe for his political toughness and inflammatory rhetoric, has shown a great deal of restrain since the 23rd of June. In contrast, the harshest threats have been expressed, in defiance of economic logic, in what has become Germany’s political periphery.

Having in mind Germany’s €51 billion trade surplus with the UK (Germany’s third export destination with €90 billion worth of exports in 2015) , Angela Merkel struck a rather conciliatory tone towards Britain in the aftermath of the referendum. After flying to Berlin alongside Matteo Renzi in order to harmonise the founding countries’ response, François Hollande followed suit and shifted to a more amenable position than during the referendum campaign. The de-escalation proved short-lived towards the end of the summer however. It became clear by then that Brexit was perceived as an existential threat less by Germany or even EU institutions than by national bureaucracies elsewhere.

For three decades, government circles in countries like France and Italy have invoked the European project (and monetary convergence in particular) in order to shirk their traditional responsibilities and simultaneously increase their informal hold over the corporate sector. The fact that they undermined capitalism in their country while pretending to promote free markets adds to the crisis of meaning that afflicts them. Despite François Hollande’s collapsing approval rating (below 5 percent) and what increasingly looks like a state crisis, there is no sign that any of his possible successors would be willing to embark on a more pragmatic path, notably when it comes to their response to Brexit.

While there would be no point in denying that the UK’s departure is an utmost complex and problematic issue, widespread denial on the other hand can only make the matter worse. The continental debate about the terms of Brexit has got off to a poor start since it implicitly rests on the narrative that Britain seeks to cast off from an ocean of progress and prosperity. Denial about the state of the EU is a recurring political reflex, yet this time seems to be different as, especially in Paris, right-minded federalist speech has decayed into calls for a scorched earth policy. The rhetorical shift from purported benevolence to reprisal is yet another indication of the bureaucracy’s anguish of dealing with the current political and economic impasse, which stretches far beyond the issue of Brexit.

This trepidation is understandable. In the current European framework little can be done to assuage fears that Brexit prefigures a more general reconfiguration. Since the referendum, several European leaders have called for a federalist leap forward so as to make it clear to the world that the European project is still moving. They however have great difficulty finding policy areas where such calls could be taken seriously. The eurozone is certainly not one of them. The German public remains fundamentally opposed to the type of mutualisation (of public debt or banking risk) and institutional constructs that believers in the theory of “optimal currency areas” think would be sufficient to make the eurozone viable. More importantly macro-economic coordination among governments is still nearly nonexistent, in the eurozone or in the EU more broadly, eight years into the crisis.

Although the UK has economic excesses of its own, these have at the very least been aggravated by the eurozone’s chaos, which has fuelled the long episode of sterling overvaluation, sky-high current account deficits and the property bubble. Bureaucratic retaliation against the UK under the shape of tariffs or a disruptive offensive against London’s status as Europe’s main financial centre would result in an additional layer of economic instability, discredit for national establishments and an even weaker EU in general.

The Leave vote has resulted from an array of causes. It would certainly be an exaggeration to reduce those to xenophobia. It would be naïve on the other hand to cheer Brexit as the victory of “common decency” (as some distant disciples of Orwell put it) against the forces of European evil. Yet Brexit undoubtedly lays bare Europe’s fault lines in an unprecedented fashion. Accountability should induce all European governments to work out a solution that both respects the British people’s vote and our common interests. Preserving intra-European trade should not be seen as a mere technical requirement. It is a funding principle of European cooperation beyond ideological lines.

It is therefore quite paradoxical that some of the political circles that have been advocating a federal model of integration for decades end up betting on a major disruption in order to discourage other electorates from following the “precedent” set by Britain. This line of thought does not seem to be concerned with the European project, let alone prosperity, any longer. Quite the contrary, it centres on the preservation of an unsustainable status quo and entrenched interests. The European system will have to devise a new path in order to let its participating countries cooperate in a freer and more pragmatic way and, subsequently, move towards the ideal of a united Europe.
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