Part III The Brexit vote: what would happen next, who would benefit and the real alternative
What would happen if the British voted for their withdrawal?
Should the British people vote for their withdrawal from the Union on June 23, 2016, the British Commissioner to the EU would have to resign from office the next day. The same would hold true for the 78 British MEPs. The leave of the about 1,000 employees of the Commission would have to be arranged. The same would apply to British employees at various European authorities. Even Europol’s director, the British Rob Wainwright, would have to be replaced.
According to Article 50 of the Contract, the Union would then negotiate an agreement with the United Kingdom, setting out the arrangements for its withdrawal. The Treaties of the European Union would cease to apply to Great Britain from the date of entry into force of the withdrawal agreement, or, at the latest, two years after the British officially notified the European Council of its intention to withdraw. In other words: The British future and its development would substantially depend on the content and the pace of implementation of the withdrawal agreement. Therefore, a vote for Brexit would mainly mean one thing for the Brits: more uncertainty. Even more so, as those advocating a Brexit have so far been a minority and have had major difficulties in describing what a better future outside of the Union is supposed to look like.
Such uncertainty would lead to a comprehensive cessation of investment, especially of foreign investment. It is commonly known that uncertainty is a classic investment killer. In the boardrooms of the private sector strategic scenario discussions would immediately start – if they have not started already. BMW, for example, has been manufacturing Mini at Oxford. For non-EU members, however, tariffs on importing cars are approximately 10 %. So it is easy to imagine what would happen in case of a Brexit. Would customers from the Continent be supposed to pay 10 % more for their Minis? So one possible scenario would certainly be downsizing manufacture in Great Britain to the size of the British market, and shifting manufacture supplying the European common market to the Continent. Toyota, Nissan and Ford will consider similar scenarios and simulations. Everybody who knows how valuable motored vehicles and their components are for British exports, can imagine what this would mean. After all, cars are “made in the UK” but mostly not anymore “owned by the UK” and not exclusively “manufactured for the UK”. Voting for Brexit would therefore have dire systemic effects on the British economy. So it is no surprise that all major car manufacturers with sites in Great Britain advocate Britain’s remaining a member of the Union. Those who prefer to trust in the naïve fallacies postulated by UKIP and Boris Johnson are beyond help. Also, the British automotive industry is just one example. Here is another one: A share of 90 % of Welsh lamb is exported to the Union according to the Welsh politician Baroness Eluned Morgan. Some people can still remember the ban on beef imported from Britain between 1996 and 2006 because of BSE; they can also remember how much the British wanted this ban to be lifted again. Scottish Whiskey is another example. The Union is a considerable market for it.
It is impossible to make a reliable prediction about how things would develop. As mentioned above, this would decisively depend on an agreement between 440 million Europeans living on the Continent and 65 million Brits. Whether Scotland would still want to remain part of the United Kingdom after a Brexit vote altogether would also play a role. Negotiations on this would probably make any previous inner-European negotiations appear straightforward. It is neither in the interest of Great Britain nor of the European Union. And we must not forget the role which the City of London plays. Its share in the British gross domestic product is an estimated 10 %. Read on for a very likely scenario of the financial service sector.
Who would benefit from a Brexit?
Dublin, Paris, Milan, Frankfurt, all of these cities would ostensibly benefit from a British withdrawal from the Union. All of these cities have a particular affinity to the financial service sector and, in case of a Brexit, they would have the advantage that their location would still be part of the European common market – contrary to London’s. Especially Frankfurt, Germany, would probably benefit. The city has developed to become the traditional home of banks in the Federal Republic and the German monetized economy. From a geographical perspective, it is right at the heart of the Union which makes it an international hub for air traffic. Moreover, Frankfurt is backed by the major European economy. The latter is rapidly becoming more and more digital at the moment and is starting to have a start-up scene which is gaining more and more momentum. What must not be underestimated, either, is that the United States European Command is within reach by just 2 hours from Frankfurt by car. And it is not the only American military facility near Frankfurt. Anybody who is familiar with the American need for security and their attachment to their military can easily work out how attractive Frankfurt would become as the new home for American banks with direct access to the European common market in case of a withdrawal by Great Britain. This, in turn, could contribute to a ripple effect on the choice of location by Asian and Arab banks. The British referendum also is of pivotal importance for the current merger negotiations between the German stock exchange Deutsche Börse and the London Stock Exchange. At the same time, the Union would want to make sure that London would not be the better option than financial hubs in the European Union in case of a Brexit. Thinking anything else would be naïve. Thus, it was quite surprising and rather disconcerting to see that Boris Johnson has decided to advocate a British withdrawal from the Union. He is doing London – the mayor of which he still is – quite a disservice. On May 5, London is going to elect their new mayor. Boris Johnson will not stand for office any longer. At the moment, odds are that Sadiq Khan, a man with an impressive immigration and family history, will become London’s new mayor; his vision is to make London better for all its inhabitants – not only for the bankers of the city or Russian oligarchs. He has decisively advocated the stance that Great Britain should remain a member of the Union and warned the British about the catastrophic consequences Brexit would have for London. Having taken this wise step, he has distanced himself from his main competitor from the British Tories who advocates a withdrawal from the Union. It is therefore of utmost importance for all Londoners to get informed about what staying a member of the EU and what a withdrawal from the EU would mean for them. Everybody who wants affordable housing, a decent national health service, jobs and not unfair working conditions such as the so-called zero-hour contracts should vote for Sadiq Khan to become the next mayor of London and for Great Britain to remain a member of the European Union. Traditionally, nations on the Continent have a strong tendency towards these concerns and much experience in dealing with these issues. So it is no coincidence that major hedge fund managers, on the contrary, advocate a British withdrawal from the Union. London and Great Britain would be at the mercy of the global financial markets more than ever in case of a Brexit.
But back to Frankfurt. Even if the city would benefit quite substantially from a British withdrawal, people from Frankfurt would be very ill-advised if they advocated it. They would get into quite bad company with other real winners: The Brexit would, first and foremost, give considerable rise to all other nationalist/egoistic tendencies in the European Union. Then, in addition, you would hardly be able to keep up counting all the bottles of vodka which would be opened in the Kremlin in case of a British vote in favour of a withdrawal. The man in the Kremlin who is working on a Russian comeback of the tsarist and communist police state domestically and who has revealed neo-imperialist traits on his foreign policy would benefit from a British withdrawal from the Union like no one else. Hardly anybody would be more glad about a Brexit. And last but not least, there are the barbaric butchers of Islamist terrorism who have the burning desire for Christian Europe to break down because of internal conflicts.
Considering all of these overwhelming disadvantages for the British people in terms of the economy, politics and security policy as well as the strengthening of the completely wrong camps, the idea that the majority of the British people will vote for a withdrawal from the European Union hardly seems conceivable. However, it is still possible.
Made possible by the refugee crisis and immigration, the British financial solidarity contribution to the Union – about which the British could not lament any louder – and finally their notion of the supposedly very endangered sovereignty of the own nation. These days, nationalists just tend to be people with cold hearts or limited wits. That is what the Nigel Farages, Marie Le Pens, Geert Wilders, Frau Petrys, Jaroslaw Kaczynskis, Robert Ficos and Viktor Orbans of this world all share. In some cases, both simply applies.
The alternative: true involvement in our European Union
British politicians have a special responsibility for Europe, in particular, the British Prime Minister. Simply because of the very fact that their mother tongue is the Lingua franca of our time. British politicians speaking in their mother tongue are understood by a large number of Europeans straight away. This would not happen to a Finish or Croatian Prime Minister. Not even to the German Federal Chancellor. Up to now, David Cameron has not quite lived up to this responsibility. His rhetoric and politics have also contributed to making national egoism socially acceptable – almost natural – again in Europe. If reforming the European Union means getting the best out of it for one’s own member state and isolating oneself as much as possible, then it will be “good night, Europe”!
The better alternative by far would be continuing to seriously work on the European architecture, to enhance the European Union comprehensively. Such an approach would require a European response to the challenge presented by the Syrian refugee crisis. Also, a fundamentally strengthened security of European external borders would be necessary for sure. A true European reform would mean adjusting European education to the challenges presented by digitalization and entrepreneurship as well as to basic knowledge on how the Union works. The creation of a common and genuine European public broadcasting service which makes European democracy accessible to citizens, strengthens European pluralism and counters forced political conformity in Kaczynski’s Poland and Orban’s Hungaria would represent true progress. The clear separation of the media and the executive should be laid down so that a situation similar to that in Italy under Berlusconi will never again be possible. The establishment of genuinely European parties would mark true progress as well. European growth and European stability need to be further strengthened. Reform in Greece – such as that of the Greek pension system – needs to be demanded and supported. People will only embrace a trans-Atlantic free-trade agreement if the negotiations become more transparent, open and more inclusive. A resolute transition of energy policy towards renewables and decarbonization as well as the expansion of the European energy grid are important measures of reform which have already been initiated. Just as the creation of a digital common market. Further strengthening entrepreneurial ecosystems for start-ups would be another meaningful step towards re-gaining more economic momentum in the Union. The mixture of all of these quite different, future-oriented measures could also give new hope, perspectives and opportunities to numerous young people in Europe’s South. Such measures would serve the common European interest for the benefit of the Union and all its citizens.
Now, the decision about staying a member of the European Union is for the British to make. For young Brits in particular, this is a decision of outstanding importance. It will probably have an impact on their entire life. However, it is about much more than a British referendum only. Basically, this is about whether Europeans believe in their own and especially their common, powerful, political and economic future in the 21st century – after a century marked by wars, fascism and communism and the separation by an iron curtain. This is at the core of the referendum on June 23, 2016.
Once again, European history will strongly depend on the British people. Their great and long-standing tradition of a parliamentary system, of open democratic debate, of direct interaction between citizens and their elected representatives, of loyalty in the fight for liberty, rule of law and pluralism would still be very beneficial to the Union and its future.
So, enough has been written. The decision is all yours, dear British people. If it would be allowed to ask modestly for one thing from the Continent in conclusion, if that appeal would have to be summarized in – almost – one line, it is very simply:
Please, stay in. Do not turn away from the European Union.
Stay a member and help shape it into a better future, too. Let us enhance it together so that it becomes a better European Union.
Together, we are stronger.
P.S. If you are a citizen of the European Union, not British, but want to let the British people know that you want them to stay with us, here is what you can do: please sign the following petition at change.org: “We want you to stay with us!”