Mateen Ali

Professor Hazzard
Honors IMS 3310
September 28, 2016
Brexits Effect on the European Union
The exit of Britain from the European Union (EU) is a pivotal movement that
will lead to the inevitable collapse of the European system. European nationalism is
largely focused within each country, leaving little room for a single entity that could
have unified the continent. These geographical, cultural, and fiscal differences
created a system that was doomed to fail from the very beginning.
The situation within Europe was precarious even before Brexit as there
were several countries struggling to keep up with their accumulating debt. Certain
European countries were prospering (creditors), while other countries have been
falling deep into debt to the prospering countries (debtors). Due to the fact that
there is a single currency between these countries, tension is escalating between
the two groups of countries. The countries that are doing well, such as
Germany/France, are being dragged down by countries that cant pay their debts.
The causes of these economic problems are very different between the creditors
and debtors. Creditors attribute the economic issues with the fiscal irresponsibility
of the debtor countries, and their lack of fiscal constraint. On the other hand,
debtors believe that these issues are derived from lack of cash flow coming in after
the Euro was adopted. Similarly, the difference in solutions are polar opposites.
Creditors believe in the use of fiscal constraint in order to bring deficits down, while
debtors believe in creating Eurobonds to spread the debt and taking policy making
out of Germany. These differences contribute to tensions between these countries. 1
Coincidentally, creditor countries tend to be located in Northern Europe, while
debtor countries are predominantly in Southern Europe. These geographical
differences further contribute to the divide between the countries, as they tend to
side with those that are similar to them. The difference in opinions and perceptions
between these two groups can be seen by public polls related to European
economics. According to these polls, 68% of Germans view the EU favorably, while
on the other hand only 37% of Greeks feel this way. Further polls show that 53% of
Germans are satisfied with the economic conditions within their country, while only
11% of Italians agree with that sentiment. This stark contrast in economic
perception can be directly correlated to the state of the countries and EU. As
sentiments worsen within the Southern countries, the stability and structure of the
EU will crumble. 2
The precariously balanced situation in Europe is at a tipping point that has
been triggered by Brexit. Tensions between Creditors and Debtors are rising, and
the collapse of the European Union is all but inevitable at this point. This process
may take time, but slowly the union will begin to disperse into smaller factions.
These factions will be based on the dire needs of the countries involved, not on
ideals that are too abstract to implement. 3

Works Cited
Steinberg, Federico. A New Union of Creditors and Debtors. Real Instituto Elcano,
n.d. Web. 29 Sept. 2016.
Comelli, Michelle. "Creditor vs Debtor Countries in the EU: A Problem of Legitimacy."
Creditor vs Debtor Countries in the EU: A Problem of Legitimacy. Aspenia Online,
n.d. Web. 29 Sept. 2016.
Flemming-Williams, Mark. "Europe Without the Union." Europe without Union.
Stratfor, n.d. Web. 29 Sept. 2016.