BREXIT?

by Bruce Dunlavy             

(My blog home page and index of other posts may be found here.)

The old Roman Empire fell in the year 476.  In the 1540 years that have passed since then, Europe has still not figured out who gets to be a nation and who doesn’t.

The result of that uncertainty is a small continent (sub-continent, really) with nearly 50 countries in it.  Africa has about that many, and the rest of the world has only around 80 nations.  It is understandable for Africa, colonized until about sixty years ago and then having its countries’ boundaries drawn by outsiders, to still struggle in the establishment of cohesive nations and firm borders.

Europe, on the other hand, has had a millennium and a half to work it out and has not managed to do so.  It took until after 1860 for a united Germany and a united Italy to appear.  The nations of Scandinavia were still sorting themselves out not much over 100 years ago.  Yugoslavia, cobbled together in 1918, split into six small nations less than 80 years later.  Czechoslovakia, formed at the same time, split in two in 1993.

Two years ago, Scotland narrowly voted to remain in the United Kingdom (UK).  Catalonia is moving to break from the rest of Spain, and Belgium is facing a potential break into its Flemish-speaking and French-speaking parts.  Russia is carefully eyeing its Baltic neighbors, and they are suspiciously eyeing Russia, which itself split into over a dozen parts after the end of the Soviet Era and is still working on final decisions.  The Russian Empire of the tsars dithered for centuries over “taking up the Slavic burden” of managing its smaller neighbors.

Image credit: huffingtonpost.com

On the other side, there have always been fitful (and unsuccessful) attempts to unite Europe into a loose confederation with common goals.  The current system, the European Union (EU), was conceived in the mid-1950s and became a reality in 1958 when the first six countries formed the Common Market.  The current EU has 27 members, 18 of which use a common currency, the Euro.

The UK, a member since 1973, will vote Thursday in a referendum to decide whether to stay in the EU.  From its earliest days – even when it was ruled by French kings – Great Britain has always had a grudging acceptance of being a part of the continent it adjoins.  A rude saying has existed since time immemorial, “[some derogatory racist term] begin at Calais.”   Calais is the closest place in Europe to England, and to some Britons it might as well be Lower Slobbovia.  There is even a hierarchy of prejudice, in that it is customary in Britain to think that the further north you come from in Europe, the better an example of humanity you are.

The British are by no means alone in this view.  Even peaceable, open Scandinavia has an ugly history of racism.  The Germans raised it to a cultural exaltation in the 1930s, and after the demise of Pax Sovietica in 1990, Eastern European fascists rose up as if from their graves to challenge and demean anyone deemed foreign.

In the UK, equilibrium has always been maintained by an uneasy acceptance of necessity, sometimes altered by internecine war (now revisited in terms of potential Scottish independence).  Part of the underpinning of this semi-agreeable unity is the general acknowledgement that, though a fractious family, the English, Scots, Welsh, Northern Irish, and residents of the odd bits of Celtic fringeland are definitely not European.

Counter-intuitively, after the UK entered the EU this coalition began to fray at the seams and edges.  What made Britain “special” was, in the minds of many, going to be diluted with Continental adulterations.  In addition, it has always rankled the UK that its membership was vetoed by France until Charles DeGaulle left the French government.  The first referendum on staying in the EU (then called the European Economic Community) was held in 1975, only two years after admission.  Opposition was chiefly based on the idea that free trade would be damaging to British industry and its workers.

The UK was never all-in on the EU, considering that it never adopted the EU’s currency, the Euro.  The pound sterling still reigns in Britain, a wise move considering the problems created by having a common currency without a common economy.  The debacle that has happened with Greece underscores this, in that the Greek economy does not have control of its own currency.  As a result, the government cannot simply print as much money as it wants, letting inflation drive monetary value, but rather must rely on the rest of the Eurozone to supply as much money as it determines appropriate to the Greek economy.  With the continent’s strongest power, Germany, making the hard decisions, Greece has been forced into an austerity it doesn’t want and which may indeed be counterproductive.

British Prime Minister David Cameron, fully expecting an easy win for continued EU membership, promised in 2013 that there would be a vote on staying in the EU by the end of 2017.  His explanation was that he could use the threat of this vote as leverage to pry concessions from the rest of the EU, assuming that Germany would go to some lengths to retain British membership as a counter to France.   Cameron started from such extreme positions (such as having a British veto over decisions made about the Eurozone, in which Britain does not even participate), that German Chancellor Angela Merkel had to call in quite a few political IOUs to get the job done.  But the results were minor and left no one looking good.

Now Cameron is stuck abiding by his foolish promise of three years ago.  There is the possibility that the side of leaving the EU (known colloquially as Brexit, for “British exit”) will win.  A leading voice for Brexit is former London mayor Boris Johnson, like Cameron a Conservative, who is something of a Trump-like figure in British politics.  While the interests of business, banking, and other establishment stalwarts are promoting remaining in the EU, populist notions favor Brexit.

Leaving the EU would be terrible for Britain.  The country would be walking out on its main trading partner, and the loss of EU money invested in British banks could destabilize the UK’s overall economy.  Northern England, Wales, and Northern Ireland have suffered the most from economic austerity measures and free trade, and they are most fearful of the free migration of workers permitted by the EU.  Thus they may be most likely to take a slap at the government by voting for Brexit.  If the departure occurs, Scotland, the strongest part of the British economy, would almost surely demand another referendum on secession, and this one might pass.

Cameron’s dithering on the issue for short-term political gain threatens long-term economic and security pain.  London’s central banks would take a severe hit, and imported goods would become more expensive in the UK.  And that’s not all.  If Scotland secedes, away will go the home bases of British nuclear-armed submarines, and the UK may not remain a nuclear power.  USA President Barack Obama warned in his most April visit to Britain that the “special relationship” between the two nations could be in danger.  Even Britain’s place on the United Nations Security Council could be questioned.

Yes, these are only possibilities, not certainties, but they do underscore the seriousness of the referendum to be held this week.  Right now the polls say it is too close to call, but the bookmakers show betting favors remaining in the EU.  My guess is that – as usually happens in these cases – the late deciders will break in favor of the status quo and the UK will stay in the European Union for now. [Update: My guess was wrong.]