Britain Votes:

What Brexit Means to the EU

BRITAIN VOTES: WHAT BREXIT MEANS TO THE EU

Britain Votes:
What Brexit Means to the EU
We look into the details of the British referendum and forecast
the impact it will have on the future of the European Union and
Britains political strategy. We analyze several key advantages and
disadvantages of this vote for all countries that will be impacted
and predict how this will shape future geopolitical strategies.
Here is a summary of some of our key predictions for how the
Brexit referendum will impact our world.
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BRITAIN VOTES: WHAT BREXIT MEANS TO THE EU

Britain Votes:
What Brexit Means to the EU
Introduction: The Brexit Debate

that of the liberated. Britain, after all, was one of

the liberators.

The referendum on whether Britain will leave the

European Union is approaching. Many see it as
a crucial test of the European Union a vote to
exit would be a crisis for both the European Union
and the United Kingdom. The debate in Britain has
been primarily about the economic and financial
consequences of Brexit, as it is called. But while
that is a fundamental issue, it is far from the only
issue and perhaps not the most important one.

Britain objected not so much to an economic

union, but to another entanglement in Continental
affairs. Where the Continent became more integrated under the European Economic Community
(EEC), the British joined the European Free Trade
Association, an association focused on Britain,
Scandinavia and a few other members.
There was more than a geographic distinction
between the two. The EEC was evolving in a direction that involved more than a free trade zone.
Increasingly, European thinking was turning to the
possibility of a deeper administrative and political institution. What emerged in the Maastricht
Treaty, which moved Europe from the EEC to the
European Union, was an entity that preserved the
sovereignty of individual nations, but created a
complex regulatory system that intruded on that
sovereignty.

There are two other questions on the table. One

is about sovereignty and the other is about Britains strategic position in the world. If Britain exits,
these two questions will have driven the decision.
The opponents of Brexit are focused on the economic consequences. Those in favor want a shift
in Britains international political framework. They
deny the dire economic consequences the opponents foresee.
The British have historically been distrustful of
the European Continent. They feared being overwhelmed by the far more populous Continent and
were afraid of wasting their resources by being
drawn into Continental disputes. Britains focus
was on its empire, and after that was lost, on the
United States.

The British decided to join the EEC despite substantial unease, because they anticipated economic benefits and assumed they could contain
the blocs intrusions on British sovereignty. Those
assumptions proved to be somewhat more problematic than expected. Brussels intrusions grated
on those who valued British sovereignty. But the
real game changer was the dramatic economic
decline in parts of Europe after 2008.

When the idea of European economic integration

was first proposed in the text of the Marshall Plan,
the British rejected the idea. They mistrusted the
French in particular. But more important, Britain
did not want to be lumped in with the rest of
Europe in the Marshall Plan. It had been Americas
partner in World War II, and felt that its relationship to the United States could not be the same as
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Opponents of the EU thought that if southern

Europe had not been saddled with a euro that was
priced to optimize Germanys interests, the European schism might have been avoided. Britain
had refused to join the eurozone. Being drawn into

2016 Geopolitical Futures

BRITAIN VOTES: WHAT BREXIT MEANS TO THE EU

extraordinarily complex disputes on the Continent
appeared foolish.

3. The fears of broken economic relations with

Europe are unfounded, as European countries
depend on their relations with Britain regardless
of whether it stays in the EU and these relationships will continue.

Britain has important economic ties with the Continent of course. But it also has close financial ties
to the United States, in part because many American financial institutions wishing to do business in
Europe chose to base themselves in London. The
U.S. and Britain are intertwined on a range of economic and financial relations. In addition, Britain is
a strategic collaborator with the United States, and
was involved in Afghanistan and Iraq in ways other
European countries were not.

4. Further compromise of British sovereignty is

not trivial, but reduces Britains room for maneuver.
5. Britain has economic and strategic interests
that do not correspond to those of the Continent.

There is an informal entity known as the Five

Eyes. It is the incredibly intimate intelligence-sharing network of the United Kingdom and the four
major nation-states that emerged from the British
Empire: the Unites States, Canada, Australia and
New Zealand. Five Eyes goes substantially beyond
intelligence sharing, to include extremely close
military relations.

The arguments for staying in the EU mirror the

arguments against: First, few have denied that EU
institutions are facing challenges and that Europe
is in an economic crisis. However, the historical
outcomes of such crises have been nationalism
and war, and leaving the EU would not protect
Britain from these threats. As a matter of national
security, playing a leading role and managing the
economic crisis is a better strategy than trying to
stay isolated from the inescapable.

This is a deep historical and cultural relationship,

far deeper than any of Britains relations on the
Continent. Given this alternative relationship and
the deep economic ties with the United States,
Britain has a multi-layered alternative to the
European Union. Therefore, those who advocate
for Brexit are not simply calculating the costs and
benefits of relations with the European Union, but
also the costs and benefits of creating a closer
relationship with the United States to substitute
for the EU. President Barack Obamas statement
urging Britain to stay in Europe certainly affected
this view, but it is understood that Obamas view
does not represent the final word on the American
position.

As for the second and third arguments, the economic relations with Europe are institutionalized,
whereas those with the United States have no
long-term definition or foundation. With the institutional foundation of Europe, Britain could retain
the relationship with the United States while working to stabilize Europe based on reliable, if flawed,
institutions.
To the fourth point, while British sovereignty matters, Britains decision-making is shaped as much
by the United States or any other relationship as it
is shaped by the EU. Any direction Britain moves
would limit sovereignty.

The argument for Brexit consists of five points:

Finally, after almost a quarter century of Maastricht, leaving the EU now would bring unknown
and unintended consequences. Whatever the current problems of the EU, the anti-Brexit side thinks
they are reparable without recourse to leaving the
union. They think that even if all the arguments for

1. Europe is dysfunctional and its failures will

harm Britain.
2. Britain would not be alone if it left the EU; it
could align with the United States.

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2016 Geopolitical Futures

BRITAIN VOTES: WHAT BREXIT MEANS TO THE EU

Brexit were true, the unknowns are so potentially
significant that they outweigh potential benefits.

In The Road to 2040, you will learn

Which country will emerge as a new major player in Europe (its not who youd expect)

The referendum will be held on June 23. Its outcome is unknown, but these are the arguments.
We have spent more time on the arguments
for leaving than staying because leaving is the
challenger. The arguments for Brexit frame the
counterarguments. Obviously, in any referendum,
there are many claims and counterclaims, and
the nuances of reasoning are lost in the desire to
persuade. But when you listen carefully, these are
the arguments and the issues behind them.

Two fundamental weaknesses of Europe (and

what this means for the future of the Continent)
Russias most prominent problem (and whether
the Russians will correct it)
The long-term impact of low oil prices (and
which countries will be most affected)
Which county will lose its status as a consolidated world power (and the reasons for its
inevitable decline)

Conclusion
As Britons prepare to vote on the future of the
countrys EU membership, understanding the
strategic considerations behind the U.K.s relationships with its partners is critical. The U.K.s
geopolitical challenges shaped its decision to join
the bloc, and will also shape Londons relations
with Brussels should British voters opt to leave the
union.

The dominant power in East Asia by 2040 (and

the events leading up to its rise)
Who will be forced to confront the Islamic State
(and whether they will be successful)
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goes into the details of what will happen no matter which way Britain votes.

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