The European Union after Brexit

Introduction

Janet Laible and Scott L. Greer

Did you ever see a slightly drunk man trying that trick with the tablecloth? He thinks he can whip the cloth off the table with a fast, clean snap, but leave all the crockery perfectly intact. He gives a sharp tug and stands back with a triumphant flourish as the plates and glasses come flying to the ground and shatter all around him.

That’s what Brexit is like. Those who have driven it have successfully pulled the cloth off the table – the underlying fabric of modern Britain has been whipped away with a shocking suddenness.

They stand in triumph, sure that they have pulled off the trick of removing a whole layer of political reality without disturbing all the family tableware. They have yet to notice that so much that was on the table is now at their feet, broken, perhaps irreparably.

Fintan O’Toole, ‘Brexit fantasy is about to come crashing down’,

Irish Times, 25 June 2016

Brexit can often appear to be an Anglo-English preoccupation. Debates about Brexit fascinate people in Britain, far more than they do inhabitants of other European Union (EU) countries. It stands to reason that people in the UK would find Brexit interesting and important, but Brexit, a major change in EU politics and a diminution of its population, economic weight, and prestige, will also change Europe. The EU after Brexit will not be the same EU, as this book makes clear.

Part of the reason for a lack of European interest in Brexit has been that talking of the importance of the UK to the EU can seem like giving ammunition to Brexit partisans who like to imagine the UK can negotiate with the far larger EU on equal terms. However, other reasons are less conjunctural and more permanent. The impact of Brexit on British politics – campaign, referendum, negotiations, and fact – has already been profoundly disruptive for many domains of public policy, for British political institutions, for the economy, for its political parties, and potentially for the constitution of the state itself. In contrast, while managing the departure of the UK has clearly loomed large on the agenda of the EU since the referendum, it carries far less urgency for the other twenty-seven member states, many of which are also contending with overlapping challenges of economic recovery, surging populism or democratic backsliding, immigration and refugee flows and anxiety over the stirrings of Russian expansionism. Nor has Brexit been the top problem for the EU itself, which continues to face profound questioning of its legitimacy more than a decade after the 2008 financial crisis.

The EU-27 and EU institutions not only have bigger problems than Britain; they also have few negotiating options. The EU’s options for responding to Brexit fall within narrow parameters around a clear focal point upon which the EU positioned itself as a unified actor at the outset of negotiations with the UK. In April 2017, the European Council articulated the consensus about its negotiating stance in guidelines adopted in the wake of the UK government triggering Article 50 Treaty on European Union (TEU), emphasizing the importance of the integrity of the Single Market over ‘participation based on a sector-by-sector approach’, noting the indivisibility of the four freedoms of the Single Market and rejecting ‘cherry picking’ by the UK (European Council 2017, 3). Since this time, while the UK has endured turmoil in its major political parties, contentious regional politics, the reawakening of border politics with Ireland, and mass political activism around the possibility of a second referendum, the European Union has maintained a coherent negotiating position on the eventual terms of Brexit.

While the EU has presented itself as a unified actor in the Brexit process and has acted as such in negotiations, this coherence disguises considerable uncertainties and unknowns about how the departure of the UK will resonate in EU politics after Brexit formally occurs. Imagining the possible impact of Brexit on the EU requires a mental map with multiple dimensions. The consequences of Brexit might take on negative or positive values depending on one’s preferences or be undefined over certain values but not others; they might have a differential impact on the twenty-seven remaining member states; some aspects might be within the domain of the EU to manage but others might be largely determined by external actors such as the US or global markets; and they might be highly consequential in the short term but fade in relevance over time.

Another reason why Brexit has not loomed as large in the concerns of the rest of the EU is effectively constructivist. The EU is a community of states – both a community of long-term reciprocity and repeated interactions – and also a set of elites with a sense of themselves as a collective (Van Middelaar 2013). This was evident in the course of UK interactions with other capitals after the Brexit vote. The UK tried to forge bilateral connections with different member states in order to circumvent EU negotiations and change EU preferences. That approach worked well enough when the UK was a member state, but it foundered after the Article 50 notification. That notification changed the stakes for the EU member states, making clear the importance of a tough and unified stance, and diminishing the importance of accumulating future favors from the UK. These rational reasons were backed up by the extent to which, over time, EU governments have formed an ingroup, with a sense of group solidarity and shared fate. The UK noisily and dramatically left the ingroup, with predictable effects on its status.

In addition, the EU has longstanding structures and habits of negotiation and preference formation. The EU process is well suited to this interplay between mandates from heads of government and delegation of negotiations to the Commission. Carefully negotiated mandates from heads of governments are implemented by the Commission in a way that protects the time commitments and agreements of those heads of governments. That was, notably, the approach it used on Greece, Ireland, Cyprus and Portugal, and only slightly less visibly on Spain and Italy during the debt crisis. The ex-finance minister of Greece Yanis Varoufakis fustigated the EU’s approach in a book that reveals its strength in dealing with a recalcitrant country (Varoufakis 2017). Its strength also involves the use of delegation, to the Commission typically, which can allow issues to drop off the EU agenda for long periods of time. As Ivan Rogers noted in a 2018 speech at the University of Liverpool, the ‘EU, while strategically myopic, is formidably good at process against negotiating opponents’ (Rogers 2018).

Finally, Brexit ratifies a process that has already been happening for some time, as some of the chapters of this book make clear. The longstanding ‘awkwardness’ of the UK as a European partner is a mainstay of EU policy discussions. Yet more recently the absence of the UK as a constructive player in the EU, from conversations in policy networks to discussions of grand strategy, has also been notable. It is a matter of debate when the UK’s divergence from the EU first became starkly apparent, and whether it is reversible, but we can date the clear trend to the Iraq War, when the last UK government with pro-European (and even pro-Euro) instincts broke with its European partners in pursuit of a global, putatively Anglospheric, strategy. Under Prime Ministers Gordon Brown and David Cameron, the UK government withdrew from constructive participation in many EU forums. Existing UK political capital, from the competence of its civil service to the high profile of its academics, disguised this loss of political engagement, even as British policies in areas such as civil service reform and higher education also eroded that capital stock. Thus it should not be a surprise that the other EU member states are quite good at making policy without the UK. They have had time to practice. Brexit, as Greer and Löblová note in Chapters 4 and 8, seems to be a bit like bankruptcy. As a Hemingway character puts it, it happens ‘gradually and then suddenly’.¹

Even in the case of a harder Brexit, there may be limits to the disruption caused to the UK and European economies and societies, but there will still be dramatic changes in the politics of the EU. The result will be a radically changed scope for political discord in Europe (Schattschneider 1960), one in which the liberal member states’ coalition is weakened in such a way as to undermine the basic coalitions of EU politics in the Council and Commission. Without the UK, the northern liberal bloc that stretches from Ireland to the Baltic states is severely weakened: it cannot command enough votes against France and its likely allies. Reorganization as a new ‘Hanseatic League’ might strengthen such countries, but they will hardly sustain an alliance that could only focus on liberalization with the support of the large, powerful liberal ally, the UK. Realistically, the optimal strategies for Denmark, Estonia, and Ireland need not coincide. Without the UK as an anchor in the Council and Parliament, it is far from clear that they will choose to cooperate for long.

Talking about Brexit

This volume seeks to fill the gap between the UK-focused literature on Brexit and the EU-focused literature on Brexit. Understandably, the minds of many UK scholars have been focused by the combination of the political earthquake caused by the result of the June 2016 referendum, the subsequent misadventures of Westminster political leaders, and the enormous policy implications of Brexit. The focus of publication has been on explanations of the vote (e.g., Hobolt 2016, 2018; Clarke, Goodwin and Whiteley 2017; Fabbrini 2017; Evans and Menon 2017; Diamond, Nedergaard and Rosamond 2018). In other words, such works ask: how could British voters have done this? Furthermore, a large volume of literature explores different policy areas in Britain (Fahy et al. 2017; Costa-Font 2017) and the implications for nationality and territorial politics (e.g., de Mars et al. 2018).

Even from a strictly British point of view, this emphasis on the vote and the voters has left some surprising areas to the side. Few British accounts delve into the institutional preconditions of Brexit – the ‘constitutional casualism’ (Weale 2018) and partisan opportunism that led David Cameron to call the vote, and the potential malfunctions this reveals. Put better, how could British elites have done this? A number of observers call for post-Brexit policies to address territorial inequalities in Britain, but few agree with Weale that the mere fact of the Brexit vote, let alone its consequences, bespeaks a serious constitutional problem. This lack of interest in the UK constitution comes with a distinct Anglo-centricity in the analysis of Brexit that matches the English focus of the referendum debate and vote. There is less discussion of the politics of the UK’s different nations, and the specific problems of the Irish border in light of Brexit than of the tensions revealed by the vote might warrant (although see Fabbrini 2017; Birrell and Gray 2017; de Mars et al. 2018). This literature is flanked by broader and more international explorations of populism, nationalism, age divides, late capitalism, the state of democracy, the politics of new media and other topics for which Brexit seems like a promising research case (Jones 2016; Weale 2016; Rose 2017; Hopkin 2017).

Literature on the impact of Brexit on the EU is much thinner. One prominent edited collection (Fabbrini 2017) has a single empirical chapter dedicated to the impact of Brexit on the EU, and much of that is about the EU’s handling of the negotiation process (Puetter 2017). It is accompanied by chapters on electoral behavior and treaty reform in the rest of the EU. A collection based on a special issue of Globalizations explores Brexit from a critical international political economy perspective but is limited to discussing the EU in terms of its place in the broader global political economy (Morgan and Patomäki 2017). While this makes it an important counterweight to the legal discussions that make up much of the literature, institutional specificities and the internal politics of the EU are not its focus.

Two other collections that focus on the EU after Brexit share a pair of preoccupations: the roots of the type of electoral behavior seen in the Brexit vote, and the possible future options for the EU (da Costa Cabral, Gonçalves, and Rodrigues 2017; Martill and Staiger 2018). In the same way that much British literature on policy and politics post-Brexit has been about scenarios, this approach focuses on imagining and advocating different ‘future European Unions’ rather than trying to grasp existing problems and processes. In a sense, Martill and Staiger capture the thinking of much current scholarship with a volume that focuses on rethinking European futures (the book’s subtitle) and understanding Brexit, albeit from outside the UK (the title of the editorial conclusion) (Martill and Staiger 2018; Staiger and Martill 2018). Da Costa Cabral and collaborators address the future of the EU after Brexit in much the same way, with more emphasis on subjecting the practical areas of the EU to mid-level theory (da Costa Cabral, Gonçalves, and Rodrigues 2017).

In other words, while the impact of Brexit is not indeterminate, it is nonetheless highly contingent with complex reverberations. The domestic complications of Brexit have been sarcastically described as a ‘fractal farce’ (Ball 2018) and we can imagine the impact of Brexit on the EU as an extremely complex set of consequences to a seemingly simple initial condition: the departure of the UK. Many scholars are addressing the fractal farce in Britain. We explore the ramifications of Brexit for the EU.

The comparative politics of Brexit

Our volume complements and extends, and sometimes argues with, these approaches by foregrounding the EU with mid-level theories rooted in comparative politics, political economy, and institutionalist approaches to politics and economics. It brings this mid-level theory to a literature that is often either narrowly focused on British voters or legal and policy scenarios, or broadly situated for examining Brexit as a case in the service of big theories of democracy or capitalism (Merton 1968). The promise of theory of the middle range is that practical research findings can be tested, aggregated and extended: it can make the EU after Brexit a case for comparative politics, and a case that comparative politics can explain.

Efforts to explain the impact of Brexit on the EU must confront the extreme uncertainty of both the process and the outcome of the project. As summer 2019 arrived, the terms of Brexit negotiated by Theresa May had not been accepted by Parliament and May had resigned her premiership. Furthermore, the possibility of a second referendum in the UK had risen and sunk on the political horizon more than once, and an extended Brexit deadline of 31 October 2019 had been agreed by the European Union. A potential ‘no deal’ scenario, greeted with either anxiety or eagerness depending on one’s political preferences, had provoked the British government to engage in contingency planning with measures ranging from preparations for stockpiling food and critical medical supplies to provisions for the deployment of the military in the event of the collapse of order. Contributors to this volume, then, have attempted to assess the consequences of Brexit for the Single Market and economic governance in the EU, on the legal order and social construction of the European Union, and on the future external orientation and institutional forms of the EU without knowledge of what the final stages of the Brexit process will resemble. Their subjects involve variables from these unknown choices about the path of Brexit, including the final decisions by the UK, as well as the uncertain consequences of Brexit for the UK itself, the EU-27, and external actors such as the US.

The chapters in this volume explore some implications of Brexit for the EU that are highly likely regardless of the ultimate form that Brexit takes: these include probable consequences of Brexit for specific policy domains and institutions, and broader changes in the ideological climate of the EU that will result from the departure of the UK. As a member state, the United Kingdom has made unique contributions to a range of policy areas and has played a distinctive role in policymaking and institutional dynamics, and its absence is likely to leave the EU without equivalent alternatives. The loss of British markets in varying forms will be an unavoidable challenge for the EU. The UK labor market, characterized by flexibility, openness, and light regulation, as well as by its size, will be a noticeable loss for citizens of Eastern and Central Europe and other labor-exporting member states, for whom free movement to the UK has helped to offset labor market mismatches in their domestic economies (Chapters 4 and 7). British capital markets are similarly irreplaceable or very costly to replace, and while the future of integrating capital markets in the EU is unclear, the absence of the UK will certainly alter its trajectory (Chapter 2). In other areas, Brexit will deprive the EU of British resources that have been central to the accomplishment of key European objectives. Professional and academic expertise and the prestige of British research communities and agencies have lent the UK considerable influence in policy networks in areas such as public health. While the UK may continue to exert influence through academic influence and participation in European-wide professional bodies, Brexit will still have consequences for the ability of the EU-27 to take advantage of British resources in policymaking (Chapters 4 and 7). In an international context, the absence of the UK from EU decision-making on defense and security will fundamentally alter the relationship between the EU and its international partners, especially the United States: without the UK, the EU may succeed in building structures that are independent of NATO but the loss of UK resources and leadership may be difficult to overcome (Chapter 10). The importance of the UK as an economic, political and military force will continue to undergird its influence in some policy areas after Brexit, but the UK itself will no longer be able to ‘upload’ its preferences, standards, or practices into EU policymaking as a member state.

Yet it is not the case, as some pro-Brexit members of the UK Parliament have asserted, that Brexit will be uniformly, or universally, more damaging to the EU than it will to the UK itself. The EU is a far larger share of UK trade than the UK is of EU trade, as Jarman notes, so the UK has both the higher stakes and the weaker hand. But what about other areas where the UK and its people have been prominent? Despite the distinctiveness of the UK, its exit might be surprisingly little noticed and possibly irrelevant for the EU-27 in some areas. For example, British contributions to the EU legal order have been considerable, both in specific fields of case law and through the impact of common law traditions on the procedures and modes of thinking about law by the Court of Justice of the European Union, but Guth (Chapter 6) hints that the impact of the UK may already be institutionalized. If so, the UK has already left a legacy for the EU legal order and its absence may not much matter. The UK may also be a replaceable, not an essential, partner among those member states that seek to slow integration, with Central and Eastern European (CEE) members building their own alliances to pursue their visions of the future of the EU (Chapter 7).

Finally, some EU member states may actively welcome the departure of the UK, as the ‘awkward partner’ will no longer create obstacles to integrating more deeply in some domains. Maas (Chapter 5) notes that free movement and EU citizenship will be disrupted by Brexit but that historically the UK has been an obstacle to further integration in the area of citizenship. In other policy areas where the UK has been obstructionist or cautious, discussions that had been sidelined or that remained unspoken may return to the fore as new momentum arises for deeper integration, for example in labor law and social policy (Chapters 3, 4, and 5). Brexit will not resolve tensions among the remaining member states on these issues. In fact it will eliminate the possibility of blaming the UK for a lack of progress in integration, but it will also remove a brake to integration and may reanimate policy discussions that have lain dormant under the shadow of a British veto.

Examining the impact of Brexit on policy and institutions speaks to the more fundamental disruption in the ideological climate of the EU that will occur with the departure of the UK. Egan in Chapter 3 argues that Brexit is a ‘series of material and ideational processes’ that are ‘reshaping the discourse in Europe that has depended heavily on the market liberalization approach pushed by the British polity’. The loss of a large member state that has been the EU’s most reliable ‘liberal champion’ with deep commitments to trade liberalization in the EU and globally, allows the EU to reset its vision for market governance as well as to shift its orientation as an international trade partner. Drawing on Börzel (2001), contributors to this volume emphasize the success that the UK has had as a ‘pace-setter’ in promoting liberal market reforms in the EU across a variety of sectors, ‘uploading’ a model of economic governance that was derived from domestic politics in the UK to shape aspects of the policy, fiscal, and regulatory environment of the EU to its preferences (Chapters 1, 2, and 3). The success of the British liberal – and neoliberal – agenda extended beyond economic governance to the foundations of public policy in the EU, turning it into a ‘force for supply-side economics and minimal political authority’ (Conclusion, this volume). Neoliberal reforms – embraced by other member states along with the UK – extended into regional policy, social policy, fiscal policy and other areas, refocusing some programmatic goals in terms of competitiveness and promoting the liberalization of services, the linkage of social policy to macroeconomic oversight, and greater scrutiny of regulatory proposals (Chapters 3 and 4).

The projection of the EU into global markets and trade has also reflected British liberal instincts, but without the UK as an ally for global trade liberalization, EU trade priorities may shift. Furthermore, the unpopularity of trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) among EU publics suggests that domestic pressure post-Brexit may further incentivize EU negotiators to recast their vision of global trade away from the longstanding preferences of the UK (Chapter 9). The durability of decades of UK efforts to upload liberal preferences to EU policymaking is therefore likely to be tested. Yet in areas such as tax and logistics, EU-27 interests in the potential economic gains from challenging existing barriers may result in greater liberalization (Chapter 3). The loss of the EU’s ‘liberal champion’ may be certain, but the repercussions are only beginning to take shape.

Far greater uncertainty emerges in considerations of the impact of Brexit on relations among the remaining member states of the EU and on the trajectory of European integration without the UK. Contributors to this volume underline the re-centering of Germany and France at the heart of EU policymaking, but their willingness to work in partnership, even with their commitment to the Single Market, can neither be assumed nor extended to predict the likely future contours of integration. In some respects, Brexit will offer the possibility for the Franco-German partnership to reemerge as the engine of integration, for example in strengthening EU citizenship (Chapter 5). Yet while both countries may be similarly cautious about market liberalization, they differ in their views on economic governance. Furthermore, their caution – and their domestic preferences – create a variegated policy space in which Brexit will favor Germany’s interests in some areas (e.g., in banking union, in which Germany has sought exceptions from integration to protect domestic financial actors) and France will have the political advantage, with fewer options for Germany to assert itself, in others (e.g., in social policy, in which France is likely to reemerge as a veto player in debates about the linkage between social policy and labor markets) (see, respectively, Chapters 2 and 4). In other areas, external factors such as the policies of the United States leave open the question of what leadership within the EU will look like. Partnership between the UK and France has been central to EU security policy, with Bindi arguing in her contribution that future EU success in security and defense will thus depend on French decisions. Yet she also notes that conflicting tendencies make predicting the path of French leadership, or coherent security policy more generally, highly problematic: the unpredictability of the US seems likely to motivate greater integration, but member states have a range of interests and concerns about state sovereignty, NATO, and the role of human rights in security policy that may muddle efforts to create coherent policy (Chapter 10).

These post-Brexit reorientations of power within the EU point to the potential for tectonic shifts in the nature of European integration, raising questions about the speed of future integration, the likelihood of more variable integration to match the preferences of Germany and France, and whether market liberalization is in fact going to remain the heart of the European project. Even if Brexit does not undermine market integration, it may slow or transform it in novel ways. In particular, the empowerment of France and exit of the ‘liberal champion’ suggest potentially long-ranging consequences in the aftermath of Brexit, including the possible rise of ‘social Europe’ as an alternative to market liberalization, and as a new foundation for future integration (Spain, which is taking the EU more seriously than usual and being rewarded with a central position in it, is another winner) (Greer and de Almagro 2016). As Egan discusses in Chapter 3, the progress of market integration depended on the possibility of domestic social solidarity as a buffer against the impact of liberalization and a European social compact that promised elements of a social safety net, transfers to poorer countries, and other ‘flanking policies’ to offset the downsides of market competition. Yet as many of our contributors note, domestic social welfare systems have failed to protect EU citizens from market downturns, from the shocks emanating from the 2008 financial crisis, or from widening inequality and social exclusion (Chapters 1, 3, 7, 9, and the Conclusion). Thus deeper integration in social policy may itself prove valuable for responding to public concerns about the economy. Furthermore, social policy could become the newly salient commitment of the EU, a marked shift away from neoliberal imperatives that recognizes the need for re-engagement with the public to keep the Single Market moving forward.

On the other hand, liberalization may continue in a highly differentiated form, enabling some member states to avoid imposing unpopular domestic costs. Egan points out that integration has de facto taken this path: some member states proclaim their commitment to the market but have pushed ‘selective liberalization’ to protect domestic constituencies. With the departure of the UK, Germany and France will be well positioned to manage the market on their terms. ‘Winsets’ to liberalize or harmonize are thus less likely to involve broad political packages and seem more likely only for specific issues (Chapters 2, 3, 4, and 5). With little prospect of resolving tensions between integration and domestic policy diversity, and little agreement on what deeper integration should resemble, Brexit may signal the first step in a ‘retreat’ from supranational Europe (Chapter 5).

In contrast, Schmidt concludes the volume with another interpretation of the EU’s differentiated past and future structures. Recognizing that integration itself has become politicized and that there will be little common ground for pursuing it through market liberalization in an increasingly heterogeneous EU, she instead looks at the legacy of the UK in shaping integration to suggest that it offers a way forward for the EU-27. Schmidt argues that by securing opt-outs, the UK effectively shaped the EU as a more flexible, differentiated Europe and that in particular British resistance served to constitutionalize differentiated integration in the Eurozone. While the EU will still be deeply divided after the departure of the UK, reconceptualizing the EU as having a ‘soft core’ with overlapping clusters of member states participating in different policy areas under a single EU administration could enable greater consensus in some areas and more democratic responsiveness. Furthermore, reimagining European integration this way allows for the possibility of continued engagement with the UK after Brexit. Instead of assuming the future of integration to be a series of likely stalemates and incremental moves forward, this approach suggests that differentiated integration offers the virtue of flexibility for member state governments, EU institutions, and citizens (Conclusion).

Themes

In the book, a