March 29, 2017 marks an historic day for Europe: The British government has handed over the official letter for exiting the European Union to EU president Donald Tusk. This move, the so-called Brexit, is an important event in EU integration—perhaps a watershed. So far, the integration process has been marked by continuous deepening toward an “ever closer Union”— from the European Coal and Steel Community to the Union as codified by the Lisbon Treaty—and by widening—from the six founding members to 28 in 2013 with the accession of Croatia. For the first time, Brexit now means that a country is leaving the EU.
While the consequences of Brexit are widely discussed, especially what the future EU-UK relationship will be, no one knows what will happen since it is the first time that a member state is leaving the EU. The United Kingdom has invoked Article 50 of the Lisbon Treaty, which states:
- Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
- A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.
The treaty allows two years for these negotiations, but mentions no further details. Europe is embarking in unknown waters.
Several problems are present. First and foremost is the question of how the future relationship between the EU and the UK will be organized. The possible scenarios range from the Norway model, which means almost full inclusion in the EU without formal membership, to a secession without any special provisions, which would mean WTO rules apply, including tariffs. More than 21,000 laws must be debated and changed during the negotiations—around 30 per day. Clearly, a Herculean task for the teams. On the EU side, former French foreign minister Michel Barnier will lead the negotiations; on the British side, Brexit minister David Davis. So far, not even the language of the negotiations (Barnier proposed French, by some observers seen as a notion to provoke the British; Davis, of course, English) nor the location have been decided. Negotiation grounds are troubled even before they start: the EU is demanding compensation payments amounting to double-digit billions of euros, a demand that has been immediately denied by London.
Meanwhile, the British government faces even more domestic challenges. On one side, Brexiteers are demanding a hard exit while, on the other side, the Labour Party wants a soft exit, meaning as much access to the common market as possible. Additionally, there is the issue of the Scottish National Party, with Nicola Sturgeon governing in Scotland and fundamentally opposed to Brexit. On Tuesday, hours before the official Brexit started, the Scottish Parliament voted for a second referendum on independence. There is also Northern Ireland, where a majority of voters was against Brexit and where a free border to Ireland has been a key element in the peace process of recent years between Catholics and Protestants. Observers fear rising tensions with the possibility of closing borders and Irish prime minister Enda Kenny spoke of a special status for Northern Ireland and even Irish unification as a possible solution. For the British government, the next two years will require an extremely complicated two-level game; every step on the European level will imply domestic reactions, and vice versa.
In all, Brexit will make the EU smaller and poorer. The UK makes up more than 12.8 percent of EU population and 17.6 percent of the economy (GDP). London is a global financial and media center. But Brexit will make Great Britain smaller and poorer, too.