UK Referendum: Brexit, Voice, and Loyalty

The membership of the UK to the European Union (EU) and its current referendum will be analyzed in light of the alternative strategies the UK has chosen since the inception of the European project. The UK first refused to become a founding member of the European Economic Community (EEC),and worked to build a competing project –the European Free Trade Association (EFTA). Then, the UK struggled to be accepted as a member of the EEC. Since its membership, the UK has delayed and obstructed further political integration of the EEC – then European Union (EU) – as its objectives were (and are) exclusively economic. At last, the Referendum of June 23 is asking British citizens: ‘Should we stay or should we go now?’. “If I Go There Will Be Trouble, And If I Stay It Will Be Double”(The Clash,1981).

 

WHY THE UK APPLIED TO THE EUROPEAN PROJECT

 

The UK did not want to be part of the European Economic Community when it was created (1957), as it had the Commonwealth association with the former British colonies. Britain still considered itself as an Empire with its own web of agreements and it feared that joining the EEC would damage the special relations with its former colonies. And yet, the UK promoted a rival project: the European Free Trade Association (1960). EFTA is an intergovernmental organization focusing on free trade; its members were called the Outer Seven (i.e. Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the UK),  vis-à-vis the Inner Six of the European Economic Community (i.e. France, West Germany, Italy, Belgium, Luxembourg, and the Netherlands). 

 

EFTA is interesting for several reasons. First, for the rationale of its creation: competition with the EEC and skepticism about its political project. Second, the market oriented free trade objectives of EFTA did not bring economic benefits comparable to those of the European Economic Community, which became a Union of 28 members – whereas today EFTA has only 4 members (Iceland, Liechtenstein, Norway and Switzerland). Finally, most EFTA members became EEC or EU-members, or asked to become so. 

 

Since the UK refused to join the EEC as one of its founding members and promoted EFTA instead, why did the UK change its mind at a certain point? Two main reasons help to explain this. Firstly, the Suez crisis (1956) was a crucial moment in UK’s history. At the time, the UKinvaded Egypt (together with Israel and France) to regain control of the Suez Canal and remove Egyptian President Nasser from power. The US, the Soviet Union and the United Nations intervened forcing the UK, Israel and France to withdraw. The crisis marked the humiliation of the UK and its partners, and officially sanctioned the end of the British Empire. Secondly, the EEC was growing rapidly, economically speaking, as its member countries were much more significant in market terms compared to EFTA ones. Hence, the UK started changing its attitude vis-à-vis the EEC.

 

In 1961 the UK submitted its first application to become an EEC member, but Charles de Gaulle, the French President at the time, vetoed British membership looking at it as the Trojan horse of the Anglo-Americans in the European project. Besides the ideological divide, the UK posed challenges to the French interests since the British were against the Common Agricultural Policy and, as a powerful country, the UK could veto and/or affect the trajectory of the EEC integration process, diminishing the influence and affecting the objectives of France. De Gaulle also vetoed UK’s second application for EEC membership. As long as President De Gaulle was in office (1969)the UK could not become member of the EEC. It was only in 1973 that the UK was successfully accepted as an EEC member.

 

IMPERIAL PERCEPTIONS

 

Despite becoming an EEC member, the UK maintained its distance from its Europeanpartners not only rejecting any greater political-federal EU integration as much as it could, but refusing to harmonize policies that would require only simple coordination efforts. The UK still keeps the system of imperial units for weights and measures, and continues driving on the left-hand side as most of its former colonies. The British are famous for their pragmatism; hence this kind of exceptionalism can be understood only as a sort of ‘former Empire complex’.

 

There are two other issues notably distinguishing the UK that are more political in nature :the UK’s opt-out from the Euro and its special relations with the US. The UK is the only country (with Denmark) with the opt-out option from the Euro (i.e. the UK can never be forced to join the single currency project).Given the current crisis the Euro is going through it might seem a very good idea not to have embarked in such an endeavor. The UK however was not just skeptical about the feasibility and strength of the Euro project, the opt-out relates to the attachment the British have to their currency. The Sterling has a long history linked to the British colonial past. During the Belle Époque it was said that the Sterling was ‘as good as gold’. Today the Sterling went down to a seven-year low against the dollar once Brexit quotations have started rising. Regarding the UK-US relations, since decolonization occurred, Great Britain seems to conceptualize its location as an accident of geography. The UK has always preferred its Atlantic relations to its Continental ones. Losing the status of Empire, the UK opted to be the most important ally of the world’s hegemon (the US) and a reluctant member of the EEC-EU, rather than a powerful member of the latter.

 

The EEC-EU were endorsed by the UK with a utilitarian perspective, i.e. were supported only in so far as they were expected to bring economic benefits. Thus, it comes as no surprise that after so many years of economic growth, of which the UK benefited, and with the EU now facing its hardest economic and political crisis, the UK is thinking of withdrawing. It makes sense prima facie, until you look at the data of the economic impact of Brexit. Populism is not a good economic advisor.

 

BREXIT, VOICE, AND LOYALTY

 

There are three options citizens, consumers, firms, and states have in the economic, social and political realm to react to deteriorating conditions: Exit, Voice, and Loyalty (Hirschman, 1970). The three strategies have different costs and benefits. Exit undercuts the possibility to counteract decline as it affects the ability of having a voice in the process. Voice refers to the capacity of exerting influence to affect change from within. Loyalty indicates a strategy of delaying Exit, trying to use Voice to determine the necessary changes.

 

BREXIT 

 

All major studies and projections of the economic impact of Brexit agree that it will cost the UK more than it will benefit. Look at business reports. Examine the analysis of The Bank of England. Read the forecast of top economic Think Tanks. Consider the projections of the International Monetary Fund. Take a look at… 

 

Take the case of trade. In case of Brexit, the UK would have to re-negotiate its access with the EU, and re-negotiate all the trade agreements of which it is currently part of as a member of the European Union. The UK will have to re-negotiate with countries such as China and India on a bilateral basis. In other words, the UK would have to re-negotiate all of its trade agreements without having behind the clout of a group of 28 countries, which represent the world’s richest market. Good luck on that!

 

The political effects of a Brexit scenario might have an impact on the UK’s integrity. Would Scotland call a new Referendum to become independent and ask for EU membership? 

 

Politically, Brexit could have a severe impact also on the EU, rising doubts on the credibility and sustainability of that project. Brexit would not promote a debate over how to address EU’s democratic deficit, rather it could be a way to give in to destructive and skeptic forces from other countries, animating populist sentiments, as well as separatist parties and movements across the EU – e.g. Poland, Hungary, Finland, and the Netherlands. In other words, Brexit could have dangerous snowballing effects on the EU. The economic crisis, the rise of far-right parties, the terrorist threat, the migration and refugee issues and the identity crisis faced by Europeans countries, all indicate that a Brexit scenario could catalyze the discontent against the weaknesses of the EU, giving a way to even more nationalism. The irony is that nationalism was exactly what the European project intended to defeat.

 

VOICE

 

The UK, as a relevant member of the EU, has managed to find its way to participation its own terms. Two examples for all: the UK has negotiated its opt-out clause for the Euro project and, on February 2016, the British managed to negotiate another very relevant agreement gaining special status vis-à-vis all the other member countries.

 

The February 2016 agreement is a legally binding and irreversible decision giving the power to the UK to obstruct any EU decision taken with majority voting without its assent that would force the UK into further integration. Why the UK needed such an agreement? Because from November 1, 2014 the ‘double majority’ rule has been promoted in the EU. This new procedure for qualified majority voting establishes that when the EU Council of Ministers votes, a qualified majority is reached if two conditions are met: 1) 55% of member states vote in favor, i.e. 16 out of 28 members; 2) the proposal is supported by member states representing at least 65% of the total EU population. If the 19 members of the Euro area were able, in theory, to vote altogether, they could outvote the remaining members (UK included). 

 

An undergraduate student majoring in European studies could still pose the very basic question: “Since one of the principles of EU Treaties is indeed to promote an ‘ever closer Europe’, didn’t the UK foresee this event as coming soon?”.The unanimity voting system has been fought over as it was obstructing the construction of the EU’s political dimension ever since. The UK agreed both to “an ever closer Europe” and to the qualified majority system. Were the Brits sleeping when they signed and ratified EU Treaties?

 

LOYALTY

 

After 43 years of EU membership the Tories have argued it was time to ask Britons whether they still wanted to be members of the Union. Given the historical skepticism with which the British have been participating in the EU project, it is fair enough to end this ambiguity. Except that no one called the Referendum for such a reason. No one expected the Referendum would take place, especially those who proposed it.The UK’s Prime Minister, David Cameron, promised to promote a Referendum when he was running for elections and when all Exit Polls forecasted he was going to lose them. The Conservative party won the elections and David Cameron had to call the Referendum on the EU membership. Ops! Before that, David Cameron could publicly argue that he had no attachment to the EU, as his goal was just to take pragmatically the most from its participation in the EU project for the UK. Recently, the British Prime Minister came out saying that a Brexit vote is immoral and could be a source of war. Coherence in politics is paramount. The UK has never supported the EU project, but just its interests within the Union. The EU will not work effectively if each country acts to promote its short term self-interests. There needs to be a sense of loyalty to a collective process. 

 

EXIT POLLS: THE BANDWAGON EFFECT

 

Voting forecasts for 'Remain in the EU’ and ‘Brexit’ are very close, almost fifty-fifty. The outcome will be determined by those who are still undecided. The bandwagon effect in voting tells us that usually people tend to vote for the side who is likely to succeed, in order to be with the winners. Expectations of how elections are going to end impact on how people are going to vote.

 

Usually, it is assumed that fear will bring people to bandwagon to the more conservative scenario – i.e. the undecided should vote ‘Remain in the EU’. Yet, given current political circumstances, people across the world show that they use their vote to signal their protest and their anger. Protest against many different issues: the economic crisis; perceived threats from immigration; anti-Islam sentiments and fears linked to the challenge of national identity; austerity measures; and… Each voter will define ‘the other’, or ‘the enemy’, as being respectively: the EU, the market, the migrant, the refugee, and/or a different religion. These factors help to explain the steady rise, especially since 2010, of all national right wing movements and parties across Europe, and the Atlantic. This shows that politics has not been able to answer to the demands and fears of citizens. Now politics fears how citizens will vote.

 

EU NORMATIVE DIMENSION: LOST IN TRANSLATION!

 

The UK can regain its sovereignty and establish its own economic and political relations with the Continent and the world as a whole. But the UK will be a ‘taker’ both in economics and politics at the regional and world level. The UK will be an island in a globalized world. No Empire. No bargaining power as a member of the EU. No attraction as the privileged partner of the US with a foot in the EU. No…. Yet, this account frames the debate of the UK Referendum and a possible Brexit in a utilitarian cost-benefit analysis.

 

The normative aspect of the EU is lost in translation. The normative aspect of the Union seems to have been written only in the founding Treaties of the other 27 member countries, not in the Treaties the UK has signed. The normative dimension is a sort of polar star helping us to move towards what is right, independently of the costs and benefits. Do you ask yourself whether you benefit from defending human rights, or you respect and defend human rights no matter what? Well… we are still discussing that in Guantanamo. But we should not. 

 

The European project was built on the ashes of two world wars to fight nationalism and create a European ethos and demos. The road is still long, true, but it will depend on the citizens and their governments to fill the EU with meaning, it does not do that by itself. The EU can be a way not only to promote ideas and principles (e.g. a federalist project), but also a way to halt the race to the bottom in social and political standards that globalization tends to exert on governments via the increasing power of lobbies and multinational corporations. The EU could be fighting tax evasion and money laundering; promoting environmental protection; defending human rights; and much more. Is this what the UK stands for?