Brexit: EU Uncertainty is the New Normal

Emotions have taken over facts.

The question of the Brexit referendum regarding the status of the United Kingdom’s membership in the European Union, is relevant to world affairs and reflects the general political mood in the West. On June 23rd, British, Irish, and Commonwealth citizens will be casting their votes for either leaving or staying in the EU. At this point, the polls indicate a 50-50 split of the vote, making the weeks ahead crucial in trying to tip the balance either side. The debate in the UK and in the United States has been fierce as Britain identifies and calculate the costs and benefits associated to either future for the United Kingdom.

The UK leadership is debating multiple issues, including immigration and its welfare costs; financial contributions to EU budget; sovereignty; and to limit the say of non-Eurozone member on Eurozone decisions. But British Prime Minister David Cameron and the EU agreed in January between about the implementation of a special status in case of the victory of the stay campaign, known colloquially as “Bremain”. But overall, the debate in the UK is about regaining control and influence over the decision-making from Brussels to London. The debate is about the power relation between a national capital and the EU.

Prime Minister Cameron has pushed for such referendum. He pledged that if re-elected, he would put the EU membership on the table for a popular vote. During his first mandate, he used serious Euroskeptic language and rhetoric towards the EU. Years later, he is the one struggling advocate for a Bremain. The political landscape is divided into two camps: the pro-Brexit and the pro-Bremain. The pro-Brexit position in favor of a secession, is led by Boris Johnson, former mayor of London, and Nigel Farage, head of the nationalist party, UKIP. In the Bremain camp, Prime Minister Cameron, Chancellor of Exchequer, George Osborne, and Labor party leader Jeremy Corbyn, have been campaigning in favor of the stay campaign. For Farage, Brexit would be a first step toward what he hopes will be the disintegration of the EU. In a recent interview with the Financial Times, he explains that he would like to see emerge “a European continent of individual, sovereign democratic states that trade with each other.”

On the other side of the pond, the United States has tried to remain apart from debate, perceiving this debate as the domestic politics of a foreign country. Washington does not want to negatively impact the Cameron’s campaign, however, President Obama has clearly expressed that the United States would prefer for the UK to remain a EU member. The American interests are directly aligned with a Bremain, as it allows Washington to be closely involved in the evolution of the European decision-making process through its decade long special relationship. But in case of UK departure, it is not certain that the special relationship between London and Washington could be as comprehensive. President Obama explained that in the event of a Brexit, the UK will not receive any preferential status on any sort of trade deal and other global deal. In addition to Ambassador Samantha Power and Secretary of State John Kerry speaking in favor of the stay campaign, Janet Yellen, Chairman of the Federal Reserve, warned that a departure of the UK from the EU could have serious global economic repercussions.

For the EU, the risks of a Brexit are quite considerable, more politically than economically. Even though the UK represents a large share of the overall GDP of the EU and is one of the largest economies in Europe, the EU will have less problems surviving such shock represented by a Brexit than the UK. In early May, the Bank of England broke its silence and warned of several considerable risks for the UK in case of a Brexit counting decline in the value of the pound, delay spending of households and businesses, increase unemployment, hit economic growth and stoke inflation. All these could lead to a recession. Christine Lagarde, head of the IMF, agreed with Mark Carney’s warnings of potential risks of recession.

In the realm of foreign policy and defense, a departure of the UK would certainly cost the future of the Common Security and Defense Policy (CSDP), and harm European diplomacy. This sector has been led by the Franco-British partnership since the late 1990s. France would lose Britain as a viable partner in European defense from both a practical and strategic angle. In foreign affairs, British diplomats have held influential positions in the newly created European External Action Service (EEAS) and over the years at the Commission.