We are living in strange times. 2016 might possibly end with Donald Trump as president of the United States, Boris Johnson as the UK prime minister and the England football team champions of Europe (probably not though). A year or so ago, none of these appeared possible; the most personable of US presidents being replaced by a hamster-coiffeured charlatan; likewise with Johnson, although no-one sane would describe Cameron as personable and the odds of England qualifying for Euro 2016, without losing a game, must have been pretty steep.
All-in-all, I don’t think things are looking particularly good.
Oh, and we’re holding a referendum on whether Britain should leave the EU.
This has had numerous effects; for example, last week, the pound was battered to a fresh seven-year low against the dollar, as surging fears of a possible “Brexit” prompted traders to dump the UK currency. Sterling dipped below $1.39 in trading, its lowest level since 2009.
Analysts from HSBC predicted the pound could fall by as much as 20% if the UK does ultimately vote to leave the European Union on 23 June, while GDP growth could be cut in half.
What began as a gambit by PM, David Cameron, to hold together his divided Tory party is turning into an alarmingly close contest. Betting markets put the odds that Britons opt to leave at two-to-one; some polls suggest the voters are evenly split; several cabinet ministers are campaigning for Brexit. There is a real chance that in four months’ time Britain could be casting off from Europe’s shores.
That would be extremely bad news—and not just for Britain. A vote to leave would damage the economy, certainly in the short term and probably in the long run. It would imperil Britain’s security, when threats from terrorists and foreign powers are at their most severe in years. And far from reclaiming sovereignty, Britons would be forgoing clout, by giving up membership of a powerful club whose actions they can influence better from within than without. Those outside Britain marvelling at this proposed act of self-harm should worry for themselves, too. Brexit would deal a heavy blow to Europe, a continent already on the ropes. It would uncouple the world’s fifth-largest economy from its biggest market, and unmoor the fifth-largest defence spender from its allies. Poorer, less secure and disunited, the new EU would be weaker; the West, reliant on the balancing forces of America and Europe, would be enfeebled, too.
The Brexiters’ case is that Britain is held back by Europe: unshackled, it could soar as an open economy that continues to trade with the EU and globally. In theory, that is possible, but it practice, it probably not how things would work out. At a minimum, the EU would allow full access to its single market only in return for adherence to rules that Eurosceptics are keen to jettison. If Norway and Switzerland (whose arrangements with the EU many Brexiters idolise) are a guide, the union would also demand the free movement of people and a big payment to its budget before allowing unfettered access to the market.
Worse, the EU would have a strong incentive to impose a harsh settlement to discourage other countries from leaving. The Brexit camp’s claim that Europe needs Britain more than the other way round is nonsense; the EU takes almost half Britain’s exports, whereas Britain takes less than 10% of the EU’s; and the British trade deficit is mostly with the Germans and Spanish, not with the other 25 countries that would have to agree on a new trade deal.
To some Eurosceptics these hardships would be worth it if it meant reclaiming sovereignty from Europe, whose bureaucrats and judges interfere with everything from bankers’ bonuses to working-time limits. But any gain would be illusory. In a globalised world, power is necessarily pooled and traded: Britain gives up sovereignty in exchange for clout through its memberships of NATO, the IMF and countless other power-sharing, rule-setting institutions. Signing up to treaties on trade, nuclear power or the environment involves submitting to regulations set jointly with foreigners, in return for greater gains. Britain outside the EU would be on the sidelines: notionally independent from, but in fact still constrained by, rules it would have no role in formulating. It would be a purer but rather powerless sort of sovereignty.
One exception is immigration, the area over which many Eurosceptics most long for control. Half of Britain’s migrants come from the EU, and there is little the government can do to stop them. If Britain left the union, it could. But doing so would have a double cost. Gaining the right to stop immigration from the EU would almost certainly mean losing full access to the single market. And reducing the numbers of immigrants would hurt Britain’s businesses and public services, which rely on French bankers, Bulgarian builders and Italian doctors.
Longer-term costs would go beyond economics. Brexit might well break up the United Kingdom itself. Scotland, more Europhile than England, is again preparing for a divorce. This could be their tipping-point. Brexit could also dangerously unsettle Northern Ireland, where the peace process over two decades has depended on the fact that both Ireland and Britain are members of the EU. The Irish government is among the most vocal foreign supporters of the campaign for Britain to stay in.
Ireland is not the only country that would suffer. European leaders know Brexit would weaken a club already in deep trouble over such issues as migration and the euro crisis. And Europe would be poorer without Britain’s voice: more dominated by Germany; and, surely, less liberal, more protectionist and more inward-looking. Europe’s links to America would become more tenuous. Above all, the loss of its biggest military power and most significant foreign-policy actor would seriously weaken the EU in the world.
The EU has become an increasingly important part of the West’s foreign and security policy, whether it concerns a nuclear deal with Iran, the threat of Islamist terrorism or the imposition of sanctions against Russia. Without Britain, it would be harder for the EU to pull its global weight—a big loss to the West in a troubled neighbourhood, from Russia through Syria to north Africa. It is little wonder that Russia’s Vladimir Putin is keen on Brexit—and that America’s Barack Obama is not. It would be shortsighted for Eurosceptics to be indifferent to this. A weakened Europe would be unambiguously bad for Britain, whose geography, unlike its politics, is fixed.
So a lot rests on the tight race that is now under way. For those who believe in free trade and freedom of movement, the benefits to Britain of its membership of the EU have never been in much doubt. What the more sceptical should recognise is that Brexit would also weaken Europe and the West. The stakes in Mr Cameron’s great gamble are high; should he fail, the losses would be widely felt.
So; to answer the original question; a majority of EU countries probably don’t give a damn if Britain leaves the EU; but they really should; after all, as Joni Mitchell sang: “You don’t know what you’ve got ‘til it’s gone.”
