The Dangers of a “Brexit” from the European Union

February 27, 2014

by Nicholas Hager

UK EU flags

The rise of Eurosceptic parties across the EU has some policymakers and commentators concerned for the future of the Union. While they are expected make modest gains in elections to the European Parliament in May, these fears may be somewhat overstated as the Parliament is currently projected to remain in the hands of establishment parties. One notable exception, however, is the continued popularity of Britain’s United Kingdom Independence Party (UKIP), whose national influence is robust— even overtaking the ruling Conservatives in a recent poll — and its message of separatism unrelenting. The UKIP is spearheading calls for a renegotiated relationship with the EU, followed by an in-out national referendum in 2017, citing a quickly integrating Eurozone and immigration as top concerns. It views the UK’s current woes as directly connected to its EU membership, and therefore sees withdrawal from the Union as a silver bullet to resolve them. But a British exit — or “Brexit” — from the EU is far from a solution; rather, it would only exacerbate the challenges the EU and UK currently face while creating a slew of new ones.

To start, the notion that an exit would somehow bolster the UK’s flagging economy is misguided. Indeed, while some believe that an unencumbered and fully sovereign UK could bemore flexible in attracting investors, there is ample evidence that this would not be the case. Citigroup CEO Jim Cowles, for example, has warned that “international companies will stop investing in Britain…at the scale we have become accustomed to.” This concern is echoed by UK Business Secretary Vince Cable, who has been working diligently to reassure international investors that the UK is a stable investment market. Economists Nigel Pain and Garry Young argue that this could reduce “long-term growth prospects [and the] productivity [of] the UK economy,” such that it would permanently be “2¼% lower…than it otherwise would have been.”

A slow drift of investment away from Britain and toward the continent would be a modest consequence of withdrawal. In the worst case, losing access to the EU market would severely diminish British trade as the EU is estimated to account for at least 30% of its total goods trade and about half of Britain’s total exports. Though the EU market is weaker than it once was, nearly all of the UK’s top trading partners are EU members. Aside from the trade barriers that would inevitably emerge from a Brexit, the UK would also find itself on the outside looking in in terms of EU policy. With an estimated 13 trillion euro GDP, the EU is a massive economy and the UK would ultimately be forced to accommodate EU standards regardless, because it is simply not a robust enough economy to dictate terms. This is amply demonstrated by the Swiss banking industry, which is “subject to significant influence and indirect control through…biased market forces [such as] U.S. and EU regulation.” Phaedon Nicolaides, a Senior Fellow at Maastricht University, confirms this in a recent paper, noting that formal withdrawal will not “confer real policy independence” to the UK because its domestic and economic law would still be “affected by developments in EU law.” In short, EU membership affords the UK, particularly in the realm of trade and foreign investment, a number of benefits that would be impossible to match in the case of its withdrawal. Therefore, contrary to the arguments of Brexit advocates, the economic health of the UK is strongly tied to its membership in the EU.

While the EU would not be undone by British secession, it could take a severe hit if that occurs. Tim Oliver of the German Council on Foreign Relations estimates that losing the UK would divest the EU of “12.5 percent of its population and 14.8 percent of its economy.” It would also force other member states to make larger financial contributions to meet budgetary expectations, and would mean the loss of the “one of [the EU’s] two serious military powers.” In addition, not only would managing an economic contraction consume a vast amount of time and resources — given that formal withdrawal has never been invoked, and Article 50 of the Lisbon Treaty, which provides for secession, offers only an opaque guideline for the procedure — it would also open an ideological “Pandora’s Box” whereby other member states could begin to leave en masse.

A Brexit would also hurt the EU economy more indirectly. The UK has always been a vital, if not always willing, partner in the European project, and is essential for the EU’s economic future. Mats Persson, director of the think tank Open Europe, discusses this through the lens of a potential trade war between the EU and China over the dumping of Chinese solar panels onto the EU market. This dispute has since been largely resolved, but the case is illustrative. China responded to the EU’s anti-dumping policies by attacking its wine subsidies through the WTO, which only encouraged the largest wine producers — France, Italy, and Spain — to lead the charge on the tariffs, which could have had disastrous implications for the burgeoning economic relationship between the two regions. Germany, a major driver of EU policy, nonetheless relies upon the UK to support its policies. With the UK’s help, Germany could form ablocking minorityto counterbalance the protectionist measures that were proposed by Mediterranean states; if the UK were to exit, however, Germany may have trouble mustering a sufficient coalition to deal with similar situations.

In the last analysis, it is clear that neither the UK nor the EU stand to gain from a withdrawal as it would diminish the strength of both economies and undermine their political influence. The current arrangement may or may not be in need of reform, but the advantages of union are too great to ignore and the consequences of ending it would be too devastating to justify.  

Nicholas Hager is an Intern at the Streit Council. Photo credit: kalyan3

5

Voting on Voting

May 17, 2011

by Griffin W. Huschke

Voting in the 2004 plebiscite

The leaders of the United Kingdom’s ruling coalition, David Cameron and Nick Clegg, have seemed a bit like the odd couple in the last several weeks.  Cameron, the conservative leader who famously slashed governmental services and raised tuition for students, has thus far been effective at maintaining the coalition’s focus on the Conservative party’s agenda, even if many of those planks were expressly repellent to the coalition’s junior partner.  But Nick Clegg and the Liberal Democrats were only going to play nice for so long, and part of the reward for holding their nose through all this NHS drama was a referendum to revamp First Past the Post electoral system currently in place.

The Liberal Democrats argue that the current system is broken because it isn’t proportional, and marginalizes minority parties.  Opponents of the Liberal Democrat’s proposed system, including the Conservative Party, say the new system is confusing, and would create weaker ruling parties, leading to more dissolved Parliaments and ineffectual government.  And in general, the public has agreed with the Conservatives–in a referendum held last weekend, voters widely rejected the Liberal Democrats proposed “Alternative Vote” system by almost 2 to 1.

In thinking about various voting systems used around the world in governments and international institutions like NATO and the EU, it’s almost impossible to offer some sort of objective analysis; voting systems are the result a country’s culture, history, and underlying political philosophies.  The system used to elect officials or make decisions speak to the values a country places on intangibles like preoperational representation, consensus, minority opinion, and the amount of political agency in the electorate.   While there are changes that can be made that affect the efficacy of an institution—the Streit Council has long argued for changes in the decision-making processes of NATO and the election methods of the European Union—the counter-arguments to these changes are usually rooted in arguments about political philosophy and state sovereignty that are convincing to many state leaders.

It seems that the public of the United Kingdom has spoken loudly about the value it places on these issues, but that doesn’t mean the First Past the Post system is necessary better or more capable of electing the best leaders in the most democratic way possible.  Sometimes issues are just a matter of public opinion.

Griffin W. Huschke is the Mayme and Herb Frank Fund Research Fellow at the Streit Council. Photo credit: Peterwalshprojects (http://www.flickr.com/photos/peterwalshprojects/2494369663/)


bin Laden’s NATO Legacy

May 2, 2011

by Griffin W. Huschke

Government Illustration of bin Laden's Compound

Well, its over.  As you’ve heard by now, probably the largest and most expensive manhunt in U.S. history is at an end.  After a decade, the perpetrator of the terrorist attacks on September 11th, Osama Bin Laden, is finally dead.

There isn’t a lot to be said about this man that isn’t already being spoken about elsewhere, and the details remain pretty sketchy. We’ll obviously be covering this for weeks to come, so let’s take a moment to think about the effects of bin Laden’s actions on the world community, and how the 17th son of a Saudi construction magnate managed to have such an outsized effect on the way our world works.

In his own unfortunate way, bin Laden drastically changed the way security organizations, especially NATO, thought about possible threats.  Al Qaeda brought to light the threat of radical Islamic terrorism, and engendered massive shifts in force structure, command and control, and information sharing across the world as countries aligned to combat this “new” threat.   Al Qaeda also gave the Atlantic Alliance a new way to focus its resources on smaller scale units, like the Special Operations forces that ended up capturing bin Laden and development projects in areas hardest hit by the seemingly endless war in Afghanistan. NATO has grown into this role in fits and starts, and there’s plenty more work to be done, but Europe and the U.S. remain to be each other’s strongest strategic allies, and the Alliance continues to adapt.

Al Qaeda also changed the way NATO thought about itself.  9/11 solidified the notion that NATO would no be used to defend Western Europe in a pitched tank battle in the Fulda Gap, but would need to respond to new threats as infrastructure became more vulnerable and the world became increasingly globalized.  NATO’s new focus on a range of threats, including cyber attacks and WMD, are a total result of this post-9/11 soul-searching, as are NATO’s continued search for out-of-area “partners” like Japan and Australia.  The Alliance realized that global threats, like terrorism and cyber attacks, require global allies in all theaters.

We obviously all wish that NATO never had to make these changes in thinking; that bin Laden had renounced violence that would claim so many lives.  But now that we have had to live through a painful decade of war and recession, let’s hope those tasked with protecting us are more able than they were a decade ago.

Griffin W. Huschke is the Mayme and Herb Frank Fund Research Fellow at the Streit Council. Photo credit: TalkMediaNews (http://www.flickr.com/photos/talkradionews/5680432685/sizes/z/in/photostream/)

 

The Streit Council’s Obligatory Royal Wedding Post

April 29, 2011

by Griffin W. Huschke

Just a couple of kids gettin' hitched

 

Ok, I thought we were going to get out of this unscathed, but its reaching a critical mass, we really can’t ignore it anymore.  Unfortunately, we’re not talking about the protests in Syria, which the transatlantic community hasn’t done much about because, according to UK Defence Minister Liam Fox, “There are limitations to what we can do.”  No, we’re talking about the omnipresent, deathless, semi-sentient God-head of news coverage that is the royal wedding of Prince William to Kate Middleton.

Indeed, the stateside news coverage of the noble nuptials has been so inescapably asphyxiating it must say something about the state of transatlantic affairs.  Looking at the two love-birds, it’s pretty easy to discern their opinions of European integration, and even though they may be on different sides of the debate, “the heart loves who it loves.” (Editor’s note: none of this is actually real, but neither are commentators about hats, so all’s fair in Royal Wedding coverage.)

You can tell just by looking at Kate Middleton that she certainly identifies with the “neo-funcationalist” school of explaining European integration.  Neo-functionalists argue that if you created a common institution between two countries, like, hypothetically, a common coal and steel community, the effects of that cooperation would “spill-over” into other areas, like fiscal policy.  The more areas of cooperation, the more integration would spill over into other areas. This would continue to increase the spill over until the proverbial snowball of supranational integration was hurtling down the mountain.

Of course, Prince William, born with the top-down sensibilities of a monarch (let them eat cake, indeed!), would never support such assertions. He most certainly identifies with Jurgen Habermas, who was the granddaddy of studying how and why countries in Europe started cooperating together after those couple of millennia of internecine warfare.  Habermas, (as certainly as Prince William does) didn’t believe that the slow march of international institutions was necessary at all.  Instead, Habermas argued that people would lose ties to their nation if they were given a supranational identity, like a constitution.  A supranational organization, Habermas argued, could be created if there was a supranational constitution that gave citizens something to believe in.  This construction would give disparate people without a common ethnicity or culture, a common symbol of unity.

In the end, neither Kate’s neo-functionalists nor the Prince’s  explain the last few years of European integration, especially the “period of reflection” since the Maastricht treaty’s tepid reception by European publics. While such deep disagreements would certainly tear a lesser couple apart, here at the Streit Coucil we wish them all the best.

Griffin W. Huschke is the Mayme and Herb Frank Fund Research Fellow at the Streit Council. Photo credit: It’s a Foot! (http://www.flickr.com/photos/56380734@N05/5669723648/sizes/z/in/photostream/)

 

 

 

Do New Weapons Encourage Us to Fight?

April 25, 2011

by Griffin W. Huschke

An MQ-1 Predator Drone

There’s a lot of news worth covering lately (Wikileaks is the gift that keeps on giving for the blogophere), but a popular article in the Washington Post today raised some especially salient points for transatlantic watchers and more general international relations scholars. A recently released study by the British Defence Ministry pondered if technological advances in unmanned aerial vehicles, like the Predator drones that are now buzzing over the skies in Libya, will allow future policy makers to “resort to war as a policy option far sooner than previously.”

Whether they knew it or not, our ponderously-spelling allies in the British Defence Ministry have wandered into the crossfire of an international relations debate that has been going on for years.  Several years ago Steven Van Evra published a work hypothesizing that if countries thought offensive weaponry were more effective, they would be more likely to go to war (while if defensive weaponry were perceived to be more effective, states would be more hesitant to engage in conflict).  For example, in the early 20th century, European countries believed they could gain a strong military advantage if they were the aggressor in war, which helped create the hostile “powder-keg” political conditions in the run-up to World War I.  This theory, which uses the “offense-defense balance” to explain why countries go to war, continues to be influential to this day, and is clearly echoed in the Defence Ministry’s assertion above.

But like anything worth saying in academia, the offense-defense balance has engendered a lot of passionate arguments among the large-brained.  Scholars argue that there isn’t really such a thing as a strictly “offensive” or “defensive” weapon (is a tank an offensive or defensive weapon?  What about heavy artillery?), and military experts almost always say the defense has the advantage no matter how evolved the weaponry.  Some also concede that the offense-defense balance is a factor that leads states to go to war, but isn’t as big of a factor as, say, shifts in international power or regime type.  Indeed, in the last several years, fewer and fewer scholarly debates seem to be referencing the offense-defense balance as a legitimate explanation for inter-state warfare.

Where does that leave us on the British Defence Ministry’s arguments about the predator drone? Most IR scholars would probably say predator drones won’t have a very big effect on transatlantic countries’ pugnaciousness in future conflicts.  While the offense-defense balance remains an important theory, most academics look to cite more established reasons for why states go to war (defending national security interests, etc.).  But I’m sure several highly intelligent people would vehemently disagree to both sides of the argument.  In the end, only time will tell how drones will change the way we fight, and even then we’ll probably have competing theories about that.

Griffin W. Huschke is the Mayme and Herb Frank Fund Research Fellow at the Streit Council. Photo credit: Beth and Christian (http://www.flickr.com/photos/six27/4698436162/sizes/z/in/photostream/)

 

Separated by a Common Alliance

April 15, 2011

by Griffin W. Huschke

NATO Headquarters

So now we’re in-fighting in NATO over the whole Libya thing.  Thirteen days into the NATO-led bombing campaign against loyalist forces in Libya, and the alliance is already showing signs of strain.  The Hawks, led by France and the UK, have expressed their displeasure over the small impact the bombing missions have made thus far (the sorties have yet to stop the shelling of tenuously-held Misurata ), and are pushing to send arms to the poorly-equipped rebels.   The Doves, led by Belgium and the empty seat Germany used to sit in, are questioning the legality of arming rebels under a UN mandate that only calls for “protecting civilians.”

While the latest spat within the Atlantic Alliance isn’t that surprising (we’re still fighting about deployments to Afghanistan) there might be some extenuating circumstances that are exacerbating tensions present in any NATO-led mission.  A general lack of political will and low levels of European defense spending are obviously contributing to the recent fracas, but operational factors may also be putting an undue strain on the alliance.  NATO commanders have all but admitted that constraints put on people and machinery by their home countries, such as limiting aircraft to a support role, is restricting the efficacy of the bombing campaign.  It may be these tactical and operational failings that are causing rifts at much higher levels.

There’s also the red-white-and-blue elephant in the room that no one seems to be mentioning much.  The U.S. pulled out of bombing missions when NATO took over, leaving French, British and other member- countries to fill the hole in manpower and equipment left by Uncle Sugar’s withdrawal.  But it’s tough for Europe to fill that gap on its own—the U.S. spends twice as much on defense as all other NATO countries combined, and NATO is designed to rely on U.S. defense capabilities.  Consider this quote from the Council on Foreign Relations in 2006:

Imagine a NATO operation with Norwegian special forces being dropped off and picked up by a Polish airlift team, protected by US satellites, an aircraft carrier and its warplanes. What makes NATO effective is its integrated military structure and its mutual defense pledge.

The author is speaking somewhat hypothetically here, but it’s a good illustration of how people have been thinking about NATO’s force structure.  The United States provides a firm base for operations, and if you take that essential piece away, it’s going to make things a lot harder for the alliance.

Going forward, moving away from consensus decision-making at the committee level would make the Alliance more nimble, and revamping some common funding elements would better distribute the financial and military costs among all members.   This would ensure the Alliance’s effectiveness even if individual member states objected to an operation, and would allow for both financial and military contributions.  The 21st century is going to require a stronger alliance to combat a host of new threats, and better integration is the only way NATO can adapt.

Griffin W. Huschke is the Mayme and Herb Frank Fund Research Fellow at the Streit Council. Photo Credit: European Parliament (http://www.flickr.com/photos/european_parliament/4128509538/sizes/z/in/photostream/)

 

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