Photo: CNN Money
Brexit: A Failed European Romance
A Culture Clash, An Age Gap, And a New World Hegemony
Josh Ehl & Evan Hays
July 13th, 2016
Photo: The Millennium Report
This past few weeks saw the United Kingdom vote in a referendum proposed by David Cameron.
The votes tallied, it was announced that parliament would now work to ratify article 50, which formally separates the UK from the EU. Immediately after the results were announced, pandemonium ensued. The Pound hit a record low in value, British stock prices collapsed, and international alliances that once
united the western world against its largest threats have since begun to crumble. Results from the referendum concluded a very striking conclusion, the younger population of England, and the
overwhelming majority of Scotland and Ulster wished to remain, but the old guard of British conservatives were able to rally behind their
leadership in the UKIP party and take the lead. Overall, the implications of this decision can be soundly broken into two categories, the economic catastrophe, and its political
In politics, mudslinging and misinformation (deliberate or not) are the name of the game. Unfortunately for the average citizen, this means that navigating the realm of contemporary politics is rather akin to maneuvering a minefield: step in any direction and you have no idea what will happen. Even more distressing is just how difficult it is for the layman to get relevant information on complex topics. One of the most common and widely disputed examples of this phenomenon is “the economy”. The Merriam Webster Dictionary defines “the economy” as this: the process or system by which goods and services are produced, sold, and bought in a country or region. Seems simple right? However, in today’s age, that’s not necessarily the case. When someone mentions something about the economy, you don’t begin to think of supply and demand, or how certain sectors are performing in their third quarter of the fiscal year, or how the Federal Reserve might raise interests rates. Instead, you might think of job numbers or how the stock market is doing as of this morning. While it’s completely reasonable to think of those when discussing “the economy”, the reality is the proverbial picture is so much broader and more vibrant. The point is, “the economy” is a complex and often times hard to understand series of relationships between major institutions, manufacturers, governments, consumers, and many more, that has been boiled down to a generic talking point for talking heads on TV or a politician campaigning for support. Given this, it’s quite easy to see how one might become easily confused in our world of constant information and fast paced politics.
Does Brexit Really Spell Out Certain Economic Doom?
When it comes to the Brexit, there are two main camps. Sure, the opinions among each group about what the future holds vary wildly, but it comes down to those wishing to stay and those wishing to leave. Those who wish to stay cite the importance of the European Union as an economic and cultural partner. In their eyes, leaving the EU will cause irreparable economic damage that could very well one nail in the proverbial coffin for Britain. Those wishing to leave the EU harp upon the importance for being able to control one's affairs without the interference of a multinational entity across the sea. Those who want to leave also claim that those wishing to stay are wrong about the real impact the Brexit will have on the economy, and vice versa. Who’s surprised? And who is really right?
Following the announcement that Britain had in fact voted to leave the EU, the British Pound took a massive hit, and several major commodities and British industries reported losses to the tune of 133 billion dollars. The FTSE 100, Britain's equivalent to the American Dow Jones Industrial Average, dropped 5.6%. In short, it was nothing but mayhem in the market place.. Surely this the economic end-times foretold by the many who voted to stay? Perhaps it isn’t. The same day that the British Pound hit a 31 year low and the FTSE 100 dropped 550 points, by the close of market the Pound had begun to rally and the FTSE 100 closed only 200 points down as opposed to 550. So as far as the short term is concerned, it was quite a tumultuous day but it did not end in economic Armageddon.
The mid to long term effects of the decision to leave the EU are what have many people worried, and rightfully so. According to the International Monetary Fund, if Britain were to leave the EU they could expect to miss out on their predicted 5.6% GDP growth by 2019, saying the Brexit is one of the :”largest near term risk to the British Economy”. However, this is hotly contested by those who champion the leave campaign. Furthermore, ten Nobel Laureates in the field of Economics believe that the smartest choice would be for the British to stay in the EU, pointing out that the Brexit will cause serious uncertainty in Britain and international markets, and potentially lead to major tariffs and diminished access to the Vital EU market, to which 63% of all British exports are shipped. However, again there are a few counterpoints to these claims. According to famed economist Paul Krugman, while maintaining he would vote to stay in the EU, “...the economic impact of Brexit would fall quite differently on different groups within Britain... some regions of the country might actually benefit from a weaker pound.”. He is also on record saying “...I would greatly discount claims about dramatic financial crisis...Maybe the pound [will] fall – but for a country that borrows in its own currency and has an excessive current account deficit, that’s a good thing.”
To understand what a political separation from the EU means, first most of us could stand to benefit from a refresher of what the EU is exactly as a political boundary. The European Union is a collection of European states that, under a series of several treaties spanning back to the end of the second world war, have coagulated into an almost singular political entity. This unification came about primarily due to political pressures from the other great western supranational entity, NATO. There has been significant overlap between NATO member states and EU members historically, and NATO is viewed as the military teeth behind the EU’s negotiating power. Arguably, the most definitive political boundary created by the EU is the Schengen Zone, an area of European territory with entirely open borders for EU citizens.
How will the exit of one single member state effect the EU as a whole?
Well it depends on the state, Brexit will have larger political shock power than say a Grexit or “Italeave” as some political theorists have forecasted.
Why is this? Simply put, it has to do with the UK’s status as a contributor to European culture and politics. The UK has always had a separate identity than that from Europe. This was evidenced enough in the fact that their people voted to leave, favoring nationalism to globalism. Acknowledging this, it’s also plain to see that the UK plays (or at least has played) a major role in Western democratic politics, and as a founding member of the EU in the following years of World War Two, much of the EU’s power centered around the UK. With the polls showing that the UK favors relative distance from Europe, other countries are bound to begin examining their national identity as opposed to the uniformity of the Union.
Take a country like Greece as an example. With their countries economy still shattered and in the hands of other EU benefactors instead of the Greek people, its not difficult to see the seeds of nationalism sown and fertilized by the Brexit. Brexit has empowered a populace, 68% of whom favor national power according to Pew research, to begin questioning the political bondage of a European Union. From the point of view of an average Greek citizen, by exiting the EU, the British people have taken back their economy, gained political autonomy, and seemingly avoided the worst refugee crisis this century has seen so far by exiting the Schengen zone of Europe. Independence is oft tempting for them who have little. When the economy is in tatters, the world is tearing at the political seams, and war is beating down your door, its easy to turn your back on the unfamiliar, especially if the big dogs, British bulldogs in this case, step out first. A Grexit would never have caused a Brexit, but a Brexit may well cause the largest supranational exodus since the fall of the great empires of yore.
This brings us to the second great political tumult brought forth by the Brexit; the collapse of Hegemonies. During the cold war, in dark and dim policy repositories, a select few politicians and professors calling themselves “realists” sat down at a map and cut up the world. It seems colonial to think about, like the dicing up of Africa by greedy imperialists in the Berlin Conference, but this division came about less than a half century ago. These realists hinged their theory on the idea that after periods of intermittent chaos, one, two, or three, international Hegemonies will emerge to bring order, even of through the threat of total annihilation. During the Cold War this was easily seen, there were no small interstate wars, only proxies with either the US or USSR on either or sometimes both sides. The cold war, was, to borrow the phrase from one of those realists “the hot peace” really.
With Britain gone from the EU, a great Hegemony of the world has begun to weaken. The question of whether or not NATO will exist anywhere near its previous strength without a strong EU remains to be answered. What is clear is that other states will feel emboldened by the nationalism brought forward by the Brexit. Even more clear is the knowledge that other countries in the EU, large and modern democracies like France, small and socialist economies like Sweden, and even the downtrodden bits of Eastern Europe, still struggling with the EU’s likeness to the political over-watch of the USSR, will be shaken by the Brexit. And despite the bright young faces of Europe, there will always be ultra-nationalists, who in the words of Winston Churchill, “won’t change their mind and refuse to change the subject”.