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Sorry, Britain, You’re Just Not That Important for Europe

The chattering classes are greatly exaggerating the implications of a Britain-free EU.

German Chancellor Angela Merkel looks towards Britain's Prime Minister Theresa May at Lancaster House on July 10, 2018 in London, England. (WPA Pool/Getty Images)
German Chancellor Angela Merkel looks towards Britain's Prime Minister Theresa May at Lancaster House on July 10, 2018 in London, England. (WPA Pool/Getty Images)

Most Continental Europeans are deeply bored by the endless theater of British politics and just want the Brexit issue resolved one way or another. A small minority in Europe, however, is deeply invested in the outcome—though its preferred outcomes are diametrically opposed. Many business leaders and liberals worry that Brexit will leave the European Union poorer, less open economically, and less likely to develop the kind of strategic mindset required for Europe to start taking care of itself. Conversely, for many federalists and other supporters of a “ever closer union,” Brexit will free the EU of a vexing member state that has thwarted the closer integration essential to meeting the challenges facing the bloc.

These Europeans’ views obviously reflect differing visions for the future of the EU. But they have one thing in common: They greatly exaggerate the implications of a Britain-free EU.

That the EU will be smaller and poorer because of Brexit, undermining its international heft, is incontestable. The U.K. economy is large in an EU context—much larger (at market exchange rates) than the combined economic size of the economies that have joined the EU since 2004. It is relatively wealthy and a major contributor to the EU budget. Britain also has strong demographics thanks to a healthy birth rate and net immigration, contributing to relatively good economic growth prospects. Losing it will reduce the size of the EU economy by 15 percent, trim its growth prospects slightly, raise its average age a little, and leave a substantial hole in its budget, forcing cuts in spending or bigger national contributions.

The second fear of the pro-Britain side—that Brexit will denude the EU of one its most economically liberal and internationalist members and therefore strengthen the influence of the union’s more protectionist and inward-looking member states—is less obvious. Britain did play a major role in the establishment of the EU’s single market and has been a consistent supporter of deepening it. But it is far from being the only liberal-minded country in the EU, and the direction of travel across the EU has been generally more liberal; the gradual deepening of the single market probably would have happened with or without the U.K.

Moreover, the U.K. is becoming less liberal and internationalist. The vote to leave the EU was not a cry for greater openness, however much libertarian right-wing Brexiteers may assert otherwise. After all, hostility to freedom of movement within the EU was perhaps the most important factor behind Brexit.

The third fear of those who regret Brexit—that it will cost the EU the military clout and strategic thinking of the U.K.—is also exaggerated. There is no doubt that Brexit will undermine the EU’s potential military capability: Britain is one of the bloc’s two big military powers, the other being France. But the U.K. consistently resisted attempts to develop an independent EU military competence, however symbolic, arguing that it would undermine NATO. Were Britain to stay in the EU, the United States’ waning commitment to European defense may force it to accept a greater role for the EU. But it might still do that with Britain outside the EU; defense and security is one area where Britain could yet remain relatively closely aligned with EU structures.

Those Continental Europeans who believe that Brexit will free the EU to get on with solving its problems are also prone to exaggeration. Their caricature of Britain as a hopelessly difficult member state that single-handedly manages to thwart essential integration is some way wide of the mark. Britain has tended to be in the majority on most votes in the Council of the European Union: In the two years running up to the Brexit vote, it voted with the majority in 82 percent of cases; between 2009 and 2015, the figure was 88 percent; and it was as high as 97 percent between 2004 and 2009. And with Britain gone, it is possible that some member states would become more difficult, as they would no longer be able to rely on Britain opposing steps that they disagree with.

By far the biggest single challenge facing the EU is how to deepen integration within the eurozone, which Britain is not a member of. The failure to reconcile the interests of the currency union’s northern creditor states with its debtor states does not lie with the British. The U.K. is often criticized for its December 2011 veto of the EU’s proposed “fiscal compact,” intended to enforce stricter budgetary discipline by member states. But it went ahead without Britain, just as an intergovernmental rather than an EU treaty. And the big challenge facing the eurozone has little to do with fiscal targets but the need to need pool risk, either through eurozone member states taking on responsibility for one another’s banks or by agreeing to issue common eurozone debt. There had been high hopes that the combination of an Emmanuel Macron presidency in France and an Angela Merkel chancellorship in Germany would open the way for progress in this areas, but the reforms agreed on have been incremental at best.

Finally, Britain has certainly been an obstacle to closer defense cooperation within the EU, and with Britain quitting the union, there may be some progress in this area. But losing Britain will do nothing to address the concrete obstacles to greater EU military competence as opposed to the political and philosophical ones. Britain and France aside, the EU’s bigger member states spend too little on defense. Budgets are rising a bit but not by enough to really address the shortfall and could well be cut back again come the next economic downturn in any case. Greater pooling of military spending will help by reducing the price of equipment but will not substitute for greater resources.

Brexit will neither turn the EU into an inward-looking, protectionist organization nor free it to get on with fulfilling its destiny of becoming the United States of Europe. The reality is more prosaic. The EU will be rather smaller economically and have somewhat weaker growth prospects, but it won’t turn inward—at least not as a result of losing the U.K. But neither will the EU be more unified and coherent for being free of the British. The U.K. may perform the role of bogeyman for some integrationists, but the obstacles to the most urgent steps lie elsewhere.

Simon Tilford is the director of research at Forum New Economy. Twitter: @SimonTilford

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