The Brits have voted to leave the EU. This has sent a shock wave across the continent, and will radiate a high degree of economic and political uncertainty. GLOBSEC Policy Institute asked leading analysts in the Visegrad region for their assessment of how this shock of Brexit will affect the EU and Central Europe. The new edition of our blog series is introduced by Jonathan Eyal, International Director at the Royal United Services Institute (RUSI) in London. The goal of our series is to stimulate dialogue between V4 capitals and western European opinion-makers on Europe’s future.
The shock generated by Britain’s referendum decision is understandable, as are fears about its implications for European stability and security. Still, there are ways to mitigate these very real concerns. First, it would be good if all European governments see the British vote for what it is: not necessarily the outcome of some bizarre British peculiarity, but a warning of a much deeper malaise which afflicts other nations in Europe. Favourable views of the EU are actually lower in France now, for instance, than in the UK, according to a Pew Institute recent survey, and other EU nations are not faring better either. These frustrations need to be addressed, rather than ignored.
EU governments should also resist the temptation of putting pressure on Britain; there is no reason why the British proposed agenda for negotiations, which entails triggering off a formal notification of withdrawal from the EU under the provisions of Article 50 of the Lisbon Treaty only in October this year, and then conducting “divorce” negotiations after that for a maximum period of two years, should not be accepted by other EU member-states. And there is no reason why Britain should not be offered a generous deal outside the EU; after all, this would guarantee the smallest amount of disruption and will not, on its own, encourage the ‘defection’ of other EU member-states, regardless of how tempted some populist parties in Europe may be to copy the British model of referendums.
The UK will remain a serious contributor to European security, and may actually end up doing more through NATO than it currently does in both NATO and the EU. Furthermore, even after it relinquishes its seat in the EU, the UK will have an interest in upholding a prosperous, open and free-market Europe; it’s unlikely that British politicians would be attracted to playing divide-and-rule games in Europe.
Of course, the current situation is not ideal, and one would have wished for a different British result. But the real danger to Europe now is to ignore the message from the British vote, or to treat Britain as a pariah.
Below are contributions from Central European colleagues, expressing the worries generated by Britain’s decision, but also looking at how Europe’s future stability can be safeguarded.
Jonathan Eyal (RUSI, London)
Wojciech Przybylski, Editor-in-chief, Eurozine and Visegrad Insight, Warsaw
The nightmare Europeans woke up to this morning cannot be sweetened enough by the expected booting out of Mr Farage from his overpaid job as Member of the European Parliament. Meanwhile Central Europe, and Poland in particular, will suffer.
In terms of economy, the UK is the third top export destination of Poland with (6.4% of all exports according to the Central Statistical Office of Poland in 2014), just after Czech Republic (6.5%) and Germany (26.3%). For Czech Republic it is the fifth top export destination (5%), Slovakia – eight (5%), Hungary – seventh (4%).
Possible disruption of trade regulations resulting from Brexit or even uncertainty will hamper V4 economies at least for a year. In addition it’s important to note that the second largest national minority in the UK after Pakistani are Poles who send home remittances of about EUR 1 billion a year. Since migrants have been one of targeted scapegoats during the Brexit campaign many of them might either consider or be forced to leave.
British Pound plunge overnight might leave UK currency at much lower levels for long, in which case it will affect Polish GDP as well as other V4 economies.
Last but not least, Britain has been a significant contributor to the EU budget, out of which much funds have propelled GDP growth in new member states. Having Britain out of the EU may open a new chapter for renegotiating financial support in structural funds to countries that were accused by other EU members of a lack of solidarity when it came to burden sharing in the migration crisis.
However, the economic turbulence is nothing compared to the loss of a politically heavy weight partner in the EU. London has been one of the fiercest critics of Russian aggressive political behavior and it will likely remain such. Yet under new circumstances it will not be able to influence EU political agenda as effectively as before. This is bad news for Poland as well as for other V4 countries, whose common standpoint will be put yet to harder test than before.
With British exit France, Italy and future Spanish (most likely) left-wing government will also bring some impulse for EU reforms but in a direction that might be different from V4 expectations. British advocacy for European competitiveness, single market and digital single market was to the advantage of new member states. David Cameron’s opt-outs are now out of question and it’s unlikely that any V4 country could dream of a possible negotiating scenario with Brussels.
In terms of EU bureaucracy, the turmoil that will follow Brexit will be huge. Although it most probably will take years to reach all legal agreements, the political implications will be immediate. In effect of Brexit the ruling party in Poland has just lost the only significant partner in the European Parliament political grouping. This will make it even harder for Poland to push its agenda in Europe.
All in all, the aftermath of Brexit will leave Central and Eastern Europeans less trustful in the general idea of the European integration project and will boost nationalist sentiments.
János Martonyi, former Foreign Minister of Hungary, Budapest
Brexit is bad news for Central Europe for all the well-known reasons emphasized prior to the referendum. The consequences are overwhelmingly negative for the EU, although we can mitigate them with the proper approach. Firstly, there is a cultural impact. The United Kingdom represents a unique and essential part of the European culture, including their language which became the lingua franca of our community. Secondly, I would mention the political aspect. We would badly need the UK’s voice in political dialogues with its balanced approach based on diversity and tolerance. And thirdly, there is also the economic impact which is now widely discussed.
At the same time, a geopolitical shift will occur. Brexit also creates a new situation, where the economic and political importance of Central Europe will increase substantially. We should not forget that the Eastern enlargements since 2004 have altered the EU and shifted its geopolitical centre ground eastwards. The move of Germany’s capital from Bonn to Berlin also indicated a similar shift two decades ago. Now our region will be indeed more central, not ‘Eastern Europe’ anymore. That should also serve as an opportunity for us, Central Europeans, and give us a chance to provide a new impetus to the European project.
(This entry was arranged by Centre for Euro-Atlantic Integration and Democracy (CEID), our partner organisation in this project)
Vladimír Bilčík, Head of EU Program, Slovak Foreign Policy Association, Bratislava
Brexit might herald a new era for Europe, an era marked by disintegration. This is the first time Brussels will be dealing with an exit of a large member state. The task for the EU will be to minimize both political and economic damage, but most of all unintended consequences of the UK decision.
‘ A View from Central Europe’ series is edited by Milan Nič and Jana Psarska.
This project is supported by the International Visegrad Fund.