Brexit Could End Up Strengthening the European Union

The European Union may strengthen after voters in the United Kingdom elected to withdraw from the Union, and Chris Miller, associate director of Yale’s Grand Strategy Program, offers analysis as to why: Britain’s economic challenges could prompt hesitation among other members contemplating a similar move. The EU will drive a hard bargain, refusing to give in to unreasonable demands by voters who were lulled with wild promises. Finally, the EU remains a key force for resolving Europe’s many challenges. With 7 percent of the world’s population, EU trade with the rest of the world accounts for around 20 percent of global exports and imports. Even without the United Kingdom, the union’s second largest economy, the EU would remain the world’s second largest import and export market, CIA data suggest. Uncertainty and withdrawal for the United Kingdom carry heavy costs. Polls indicate that news of Britain’s economic struggles is reinforcing European appreciation for the common market.
Brexit Could End Up Strengthening the European Union
A European Union flag, with a hole cut in the middle, flies at half-mast outside a home in Knutsford Cheshire after the historic June 23 EU referendum, in Knutsford, U.K., on June 24, 2016. Christopher Furlong/Getty Images
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NEW HAVEN—Events since the Brexit vote suggest that rather than leading to the disintegration of the European Union, the United Kingdom’s referendum result may actually bolster European cohesion.

There are three reasons why. First, Britain is likely to suffer economically from its vote, sending a message to electorates in other countries about the economic value of the EU. Second, Europe’s leaders will drive a hard bargain with London, which will disprove claims that the U.K. or any other country leaving the Union is likely to succeed in negotiating a better deal with EU partners. Third, perhaps most importantly, the EU remains an indispensable arena for solving European problems.

After the Brexit vote, the European Union, the group of 28 countries that collaborate on issues such as trade, justice, and education, was widely seen as a loser. The Brexit referendum marked the first time a country had voted to leave the European Union. U.K. voters have long been divided over the EU, but they are not the continent’s only Euroskeptics.

France and the Netherlands, two founding members of the European Union, have populist parties that seek referenda. France’s far-right leader Marine Le Pen, for example, declared that the Brexit vote showed that the EU is “objectively a total failure.” Dutch politician Geert Wilders called on a similar referendum for the Netherlands, declaring “Now it’s our turn.”

But leaving is already proving not to be easy. Start with the pain that Brexit will bring to Britain. There is little doubt that the economic effects of Brexit on the U.K. are largely negative. In the short and medium term, Britain’s economy will visibly suffer from the Brexit vote. Most economists have sharply downgraded expectations of British GDP growth over the next year. The International Monetary Fund (IMF) reduced its estimate of Britain’s GDP growth by 1.4 percentage points.

Withdrawal of the European Union and its constituent institutions from the U.K. will mean reduced spending and employment. British farmers or universities, for example, may lose valuable EU subsidies unless the British government steps in to fill the gap. Similarly, the London-based European Medicines Agency, which evaluates the safety of medicines in the EU, will likely move to different country if the U.K. leaves.