Academic Year 2016-2017 Term 1 POSC211: European Union Politics Professor: Clara Portela Section: G1 Question Number: 3 What accounts for Brexit? Submitted by: Niklas Schaefer (G1620046N) What accounts for Brexit? Explaining causes of the unpopularity of the EU with British population and provide solutions for preventing further exits . 1. Preamble At the 23rd of June 2016, the citizens of UK (England, Wales, Scotland and Northern Ireland) voted with a majority of 51.9% for leaving the European Union (EU). Although the referendum is not legally binding, the government stated to follow the clear mandate given by the voting result and is currently planning to be the first case in the EU history to leave the union. Theresa May, successor in the row of Prime Ministers of the United Kingdom after David Cameron, is likely going to invoke Article 50 of the Treaty on the European Union (TEU) at the beginning of 2017 to start negotiating with the EU about the exit strategy. The headline of “Brexit” was for a long time top-runner of many newspapers and TV news. However, while most journalists were covering topics around questions like “What are the impacts of the Brexit?” or “Will the UK go into recession?” this essay should go beyond the most recent news gathering, by analyzing what ultimately accounted for UK citizens to vote for “leave” in part one. To follow a suitable structure, this essay will categorize the causes and display a development in the mindset of the referendum’s voters regarding these categories. Part two will cover possible solutions for the EU to avoid that other countries could feel that it might be better to leave the EU. As “Euroscepticism” is becoming more popular among citizens of member countries, the essay will focus on solutions for issues raised during Brexit as well as general problems which could be crucial in the future. 2. Explaining the unpopularity of the EU among UK citizens 2.1 Introduction It can be taken for granted that many various factors accounted for the vote result. These causes can be categorized in eight categories namely historical/direct EU-related, economic, political, social, sovereignty-related, referendum-related and external relationship-related reasons. The second step in analyzing the result is linking the causes back to the voters, as they had the choice between “leave” or “remain.” To begin chronologically, the essay will start off with the development of the relationship between UK and EU. Page | 1 2.2 Causes in the history of relationship between the UK and the EU Going back to the roots of EU’s origin, we will start in 1957. West Germany, France, Belgium, Italy, Luxembourg and the Netherlands established the European Economic Community (EEC), which should foster economic cooperation among European nations. The first touchpoint between UK and EEC (can be seen as a processor of EU) was in 1963, as UK applied for membership in the EEC. But this attempt was vetoed by France, because it had concerns about the UK undermining the EU and that “a number of Britain’s economy, from working practices to agriculture had made Britain incompatible with Europe.”1 However, in 1973 UK finally became a member within the third application. However, somehow there was tension right from the beginning. Only two years later the UK questioned the membership for the first time and held a referendum. This time in favor for staying in the EEC with 67%. “The center-left Labour Party split over the issue, with the pro-Europe wing splitting from the rest of the party to form the Social Democratic Party (SDP).” 2 Tensions were becoming heavier in 1984 when UK’s Prime Minister (Margaret Thatcher) outlining a plan to reduce British contributions to the EEC budget. It is important to keep in mind that the UK was the third-poorest country at this time and it was paying relatively more than other nations. Thatcher managed to negotiate a 20% “rebate” for agriculture subsidies, which is still in place today. After the official creation of the European Union within the Maastricht Treaty 1993, the EU attitude towards integration had changed. “Common policies” were shifting competencies towards the community (as shown in figure 1), which were a cut into national sovereignty. Also, a single currency (except for the UK) was planned to establish. The Treaty of Lisbon in 2007 shifted, even more, competencies to the left half of figure 1. Figure 1: The Treaty of Maastricht settled a massive expansion in the number of areas in which the EC is active within the Union down. There is no area which the EU is not active in. (Source: http://www.dadaloseurope.org/int/grundkurs2/zwischenbilanz.htm) 1 2 (http://www.history.com/news/the-history-behind-brexit) (http://www.history.com/news/the-history-behind-brexit) Page | 2 The tension became visible as 1999 the ban for British was lifted, which was put in place one year before, but France continued proceeding the ban for several years. This can be seen as one example where EU was not able to solve an intra-union conflict and ended in a negative experience for the UK. The negative perception was also visible during the presidency of David Cameron as the UK prime minister. Despite the fact he has promoted the EU membership, he promised to renegotiate the membership conditions, including reduction of migrant support payments and an easier way for Britain to block regulations, in the EU. However, at this time the popularity of the UK Independence Party (UKIP) was rising, and more and more anti-EU politician joined the movement. The wish for more increasing blocking power regarding regulations is an indicator that the UK is often not in-line with EU opinions. For example, in Turkey’s case, the British hardly tried to stop Turkey being successfully accepted by the council as an applicant. They feared a bigger flow through of immigrants. In conclusion, the EU-membership opposition’s support in the UK has varied from 30% to 60% over time, and this fact is supported by Figure 2, which ranked the UK at least integrated member country, as the majority of the British do not identify themselves as Europeans. Figure 2: The UK is ranked 28 out of 28 for European identity: nearly two-thirds of Britons do not identify as European at all. (source: http://blogs.lse.ac.uk/politicsandpolicy/explaining-brexit/) 2.3 Causes in political structure of UK Closely linked to the topic of EU-UK relations are the causes categorized under the political segment, which might have led to EU’s unpopularity among the British. Political independence – so-called sovereignty – is possibly one essential point. During the development of the EU, some causes in paragraph 2.1 indicated that a national independence is one of the opportunity costs when entering the community. But why is it just a particular case in the UK? Because Britain was used to a monarchy and was applying a common law system, which contrasts the civil law system established by most of Page | 3 the other member states. This difference directly influences the integration process. For the UK it was harder to accept giving away so much power. For example, there was a growing distrust of multinational financial, trade, and defines organizations, such as IMG and NATO. The described development is not only applicable in UK’s case. A rise of nationalism can be seen nearly everywhere in the world. On the day of referendum statistics from Lord Ashcroft’s polling team has shown that “Nearly half (49%) of leave voters said the biggest single reason for wanting to leave the European Union was ‘the principle that decisions about the UK should be taken in the UK’”.3 2.4 Economic and Financial reasoning The topic which is widely discussed in the current media is the impact of Brexit on their economy. As it directly affects companies, labor or taxes it is very relevant to citizens. Therefore, we can assume that this area also triggered some of the EU reluctance. An issue which is mostly mentioned in articles indicates that the EU was not capable of fixing the economic crisis. For example, after the financial crisis in 2008, the unemployment rate of most southern Europe countries has risen to 20% and still stands today.4 Of course, this is not directly affecting economic behavior of the UK, but Anti-EU politicians are stating the fact that the economic strength – namely the power of London as a financial center of the world – was not created due to EU development but was rather through the earlier two centuries. By refusing to join the common currency – the Euro – the UK sends a strong message to the other member countries because they did not want to go into a deeper economic relationship with the EU. A vaguer topic is the contribution of single countries to funds of the EU. A political slogan used in the campaign of the “leaver” movement stated to free up £350m a week by saving on EU contributions when leaving the European Union. This straight forwarded message was easy to understand and persuasive at the same time. However, in fact, analysts have shown, due to enjoying certain discounts the number is far lower as well as when holding against the additional costs created by the assertion the Brexit is not profitable anymore. At this point, it would need a deeper analysis to come up with a comparison between costs and benefits. For the fundamental question, it is only important to know that the British people perceive the effect of EU on financials as harmful or at least not worth the costs. 3 4 https://en.wikipedia.org/wiki/Causes_of_the_vote_in_favour_of_Brexit http://www.economist.com/blogs/graphicdetail/2015/07/daily-chart-europes-long-term-unemployed Page | 4 2.5 Social aspects When talking about social reasons for the increasing dissatisfaction against the EU, we are most of the time referring to the most recent social problem Europe is confronted with – the immigration crisis. A lot of EU countries saw aiding the refugees as a reasonable obligation, but the opponents saw a national issue, as it affected the internal life of a country. Regarding Lord Ashcroft’s election day poll the immigration was indeed the third main reason of leave voters. Those respondents said that leaving “offered the best chance for the UK to regain control over immigration and its own borders.”5 But according to most recent numbers UK was facing a migration inflow of 268,000 in 2014, which is only ¼ of the EU average on asylum application per 1000 capita. In particular, and relating back to EU politics, UK claims that no restrictions on EU migrants after the Eastern Enlargement in 2004 (the biggest enlargement) were imposed, because the new member states contributed to a hike in migration levels that undermines contemporary voter attitudes. The concerns occurred due to a more conservative attitude towards immigration than other countries. The UK was for a long time lead by a monarch and not by an institution and the geographical location - meaning no direct borders to foreign - made the UK less open for cultural influences from and spillovers. 2.6 Causes due to other external relationships On concern about actually leaving the EU was the close ties with the EU countries in trade. However, these ties are not as strong as compared to other nations (compare to Appendix 2: UK exports less to the EU than every other country and only the Netherlands imports less from the EU than the UK), due to the fact that the UK is also fostering strong relationships with the United States of America. Having in the alternative of closer cooperation up their sleeve, UK could plan to strengthen the US relationship, maybe even in the direction of a Free Trade Area, to offset the cut in a trade with the EU. 2.7 Root causes in the matter of the referendum and voting behavior Starting off with the historical objects triggered an unpopularity of the EU, the focus will be now on reasons around the date of the referendum. It is significant to say that there is a difference between the attitude of UK towards EU and the vote results, as the vote result does not represent every single person’s opinion and there might be some events pushed voters for one decision. This will be analyzed in the following. Interpreting the results means automatically figuring out how the voters weight the previously described issues: 5 http://www.telegraph.co.uk/news/2016/06/29/did-britain-really-vote-brexit-to-cut-immigration/ Page | 5 Firstly, the “remain”-campaign (around David Cameron, Conservative Party) needed votes from the opposition (Labour party) to win the referendum. In fact, the majority of the Labour party would have backed staying in the EU, but they could not win the vote of their supporters. Two members of parliaments (MP) from the conservative party namely Michael Gove and Boris Johnson’s were the first who supported Brexit in public. The justice secretary and the former mayor of London were two popular political persons in the UK, which immediately became the faces of Brexit. The “remain”- the campaign was just in lack of appeal. Secondly, both campaigns made use of exaggeration, but the “leaving” clan were concentrating on the costs of EU memberships, which was very accessible and catchy to promote. But “Sir John Major claimed that Vote Leave had deliberately misled voters by using the Gross contribution to the EU, £360 million.”6 According to analyst’s special rebates need to be subtracted, such as 40% discount from gross contribution (counts up to about £144 million) and various industry rebates (worth about £96 million). The remaining difference would only account for £110 million. Thirdly, referring to Appendix 1 the demographics of the voters play a significant role. Because all the reasons affect groups of people differently. The reasons which are appealing to the largest group of electors had, of course, the most substantial impact on the referendum. It is now clear that mostly older voters were favoring the Brexit. It can be taken for granted, that seniors are more likely to perceive immigration negatively. Moreover, just regarding the timing, the immigration crisis was very present in whole Europe. So the vote was mainly affected by the attitude towards immigration. Combining these two facts with the statistics that usually older people put more effort in going to vote, the results are comprehensible. 2.8 Conclusion Taken everything into account, there are three messages sent straight forward. First, UK was one of the least integrated member countries - meaning it was at least ‘Europeanised’ regarding trading patterns, capital flow, and migration patterns - and had policies issues since it accessions. Second, many factors are contributing to the overall opinion about Brexit, but the issue of immigration was very present. Moreover, third, the question “who voted for Brexit?” also answers the question “why did the majority vote for Brexit?”. 6 http://www.thetimes.co.uk/article/boris-and-gove-lash-cameron-on-immigration-5kj Page | 6 3. Preventing other countries to follow the UK 3.1 Introduction Preventing other countries to follow the example of Brexit is probably one of the biggest concerns of the European Union at the moment. Apparently, Euroscepticism is not an individual case anymore. In general, poorer EU nations (Bulgaria, Malta, Poland, etc.) tend to be irresponsible to leave the EU. Their membership guarantees access to subsidies and foreign investments. Other countries like Ireland, Austria or Luxembourg, who gained a lot of political or financial power are as well unlikely to leave voluntarily. However, there are a few countries, in which anti-EU parties have made significant electoral gains. UK’s referendum triggered further polls in five other member countries. So not only because of the Brexit but moreover regarding the headwind in many countries prompt actions by the EU are needed to address these problems. 3.2 Possible solutions One important point is to respect sovereignty. Sovereignty was the main issue in the integration problem between EU and UK and is important to many states. Even though the European Union should promote trade between the countries and foster growth by implementing common policies, the overall sovereignty of countries needs to be respected. The EU tries to combine similarities within countries to generate strength as a trade union, but when countries differ in certain areas (e.g. UK in agriculture in the first years after accession, or the UK regarding neglecting Turkey as an applicant), there should be new measures which ensure, that no opinion is ignored. This approach can emerge in a different direction for example in rethinking the blocking minatory option in the qualified majority voting. Basically, we see a lack of effective opposition to EU policymaking and social consensus. There is widespread dissent for people to promote change, which is rather constructive than irreversible. When talking about sovereignty, we can question the distribution of competencies between the EU and member states. As already shown in Figure 1 most of the competencies are ruled by the EU or together with the EU. This raises the question, whether it might be appropriate to shift competencies from the left part (exclusively EU competencies) to the right part (exclusively MS competencies). In the case of Brexit, it was clearly a failure in successful integration. The European Union should pay more intention to the integration process. It is indeed quite frequent that after the applicant is accepted, the process of integration slows down. The EU must not think about integration only from the enlargement point of view, but also has to support the getting together of member states. A solution for promoting the benefits of the EU membership better is making the membership worth it by providing growth to the union. To achieve this goal, the EU need to carry out fundamental reforms, for example in the form of: “cut unjustified social benefits; liberalize services, labor markets, Page | 7 and digital markets; reduce labor taxes; deregulate industry; improve education, and promote research and development.”7 Appendix 3 shows that the fear of negative economic impacts after Brexit are very high. So the EU should promote exactly this safety and reliability of its financial measures. The favorite topic of the Brexit discussion and even a possible trigger was definitely about Immigration, which is often used by populist as an example of failure. To begin with, an orderly migration policy linked with proper conditions combined with a control framework is a good first approach. Recently Frontex, the EU border control agency, was upgraded and staffed with more officers, ships and helicopters (Frontex 2.0). However, besides the equipment, Frontex will need a stronger mandate. Going even one step further, the EU can try to address the roots of immigration crisis – the conflicts in Syria and Libya, for example by supporting the NATO with a joint foreign and defense policy. When talking about member countries, we are not only talking about the national governments. The citizens of EU are the most important stakeholder. As there are many misperceptions among people in the EU, transparency is a key solution to generate a real understanding about EU-related topics and even encourage opportunities to engage. This all forms part of the EU’s crisis of legitimacy. Figure 3 is one prove of the fact that EU citizens do not know exactly, what the EU is actually doing for them. Even the most know achievement (opening borders) is known by less than the half of those surveyed. Figure 3: this infographic looks at what citizens from around the EU see as the greatest achievements of the EU 3.3 Conclusion On the one hand the need for change is clearly visible due to the re-emergence of anti-EU parties, and on the contrary, the EU needs to find solutions for external problems (e.g. immigration crisis) threatening the effectiveness of EU policies. The EU remains a robust framework and a unique example of inter-state collaboration, but it will be interesting and important to see, how the EU officials and the institution will react to very recent developments in the future. 7 http://www.straitstimes.com/opinion/what-the-eu-must-do-now Page | 8 Appendix (1 to 3) Appendix 1 Appendix 1: source: www.ft.com Page | 9 Appendix 2 Appendix 2: The chart shows percentages of imports from the EU and exports to the EU. The UK is ranked 27 out of 28 for imports, and 28 out of 28 for exports. (source: http://blogs.lse.ac.uk/politicsandpolicy/explaining-brexit/) Appendix 3 Appendix 3: According to a recent YouGov poll, a rise in unemployment would convince the most Leave voters that the UK should remain in the EU Page | 10 Bibliography Britain's EU referendum: The Brexit vote reveals a country split down the middle | The Economist. (2016). Retrieved November 06, 2016, from http://www.economist.com/news/britain/21701257-results-paint-picture-angry-country divided-class-age-and-region-country-divided Lee, T. B. (2016). Brexit: The 7 most important arguments for Britain to leave the EU. Retrieved November 06, 2016, from http://www.vox.com/2016/6/22/11992106/brexit-arguments News, B. (n.d.). Eight reasons Leave won the UK's referendum on the EU. Retrieved November 06, 2016, from http://www.bbc.com/news/uk-politics-eu-referendum-36574526 Causes of the vote in favour of Brexit. (n.d.). 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