The end of Europe?

THE fateful decision of British voters to leave the European Union has been welcomed by all stripes of extremists.
The end of Europe?
Representational Pic

THE fateful decision of British voters to leave the European Union has been welcomed by all stripes of extremists.

The departing head of the UK Independence Party, Nigel Farage, crowed that "we have won back our country". Marine La Pen, of the National Front (FN), declared: "Maintenant France" (Now France)! Donald Trump claimed he was "on the right side" on Brexit. And, Al Naba, the militant Islamic State (IS) group's magazine, welcomed Brexit and predicted it will lead to "the disintegration of the UK — and of Europe".

The English vote for Brexit represented a microcosm of the resentments, racism and xenophobia unleashed among the European working class by the prolonged economic crisis and high unemployment, the failure to fully integrate immigrants, the huge recent influx of mostly Muslim refugees and African migrants, and the terrorist attacks in Paris and elsewhere. These sentiments are now widespread across Europe and extend to the US. Brexit's consequences will be extensive and strategically significant.

The Czech foreign minister wrote in the Financial Times that the UK now faces "a currency plunge, an economic slowdown, a political vacuum, the possible secession of Scotland, and uncertainty over the Northern Ireland peace settlement". British politicians want to retain the benefits of the EU's 'single market' and London's role as a global financial centre but they do not want the EU's "freedom of movement". The two basic options available to the UK are both bad: either isolate itself economically from Europe, or accept a Norway-like status allowing trade and labour movement within the EU but without a voice in EU decision-making. Reversing the referendum does not appear to be a politically viable option.

A UK in political disarray has delayed 'triggering' exit negotiations. Other EU members want a speedy divorce. Most of them seem determined to penalise the UK for its decision, mainly to ensure that others are not tempted to follow its example. The precise nature of the UK's relationship with the EU and other economic partners will not be clear for at least two years.

Meanwhile, in view of the uncertainty, investment in the UK will decline as will its trade. Other Europeans have already begun to vie for London's financial institutions and companies. A slowed British economy may heighten social and political tensions, propel separatism in Scotland, revolt in London, and instability in Northern Ireland. It could become an existential crisis for the UK.

Brexit could not have happened at a worse time for the European Union. Despite massive 'monetary easing' by the European Central Bank, EU growth remains abysmal. Greece's economic crisis will recur. A Greek exit from the Euro (Grexit) remains on the cards. The border blocks thrown up by several EU members to stop the refugee influx have heightened political divisions and threaten to break down the Schengen visa-free zone. The racial and religious prejudices, crystallised by the inflow of refugees, high unemployment and low growth, have contributed to the rise of populist right-wing parties across Europe. Hungary and Poland are now ruled by such 'nationalists'. France, Austria and the Netherlands may well be so ruled soon.

The exit of Europe's second largest economy will reduce the size and economic potential of the European Union. Germany's insistence on economic austerity and monetary discipline, unless reversed, may slow down growth further, reinforcing the rise of the Eurosceptics. EU leaders could face challenges from other 'exiters', perhaps France under the FN, or the Netherlands and Austria if the nationalist parties there win forthcoming elections. The preservation of the European Union may emerge as its principal agenda in the near future.

Copious amounts of vodka must have been consumed in the Kremlin after the Brexit referendum. Britain's exit will eliminate one of Moscow's main antagonists within the EU. The greater influence of Germany, Italy and France, who favour engagement with Moscow, implies that the Ukraine-related EU 'sanctions' against Russia will dissolve very soon, opening the way for restored economic relations.

Brexit has also happened at a sensitive moment for European security. The forthcoming Nato summit in Warsaw is to consider plans to enlarge military deployments close to Russia's western borders, to reassure the Baltic states and Poland in the aftermath of the Ukraine crisis. Apart from these border states, plans for Nato remilitarisation have been most vigorously propagated by the UK and US. The major EU members — Germany, Italy and France — are cautious about large permanent deployments and military exercises in Eastern Europe that may violate the post-Cold War Nato agreements with Moscow and provoke an unwanted military crisis.

These countries also want to create a European defence force independent of Nato. An ambitious Nato build-up may thus become more difficult to realise in the post-Brexit environment. British and American influence over European security decisions may decline progressively. The security relationship between Europe and Russia could change from hostility to coexistence, if not cooperation.

There is genuine concern among thinking Americans that the result of the reckless British referendum may propel resentful white working class voters in the US to turn to Donald Trump to 'get back' their country. If Trump is elected and actually does what he has promised — to withdraw from trade agreements and military alliances with Japan and South Korea as well as Nato, build a wall against Mexican immigrants and ban the entry of Muslims — it could return America to isolationism, proliferate protectionism, provoke multiple trade wars, fragment the world economy, unleash a clash of cultures, validate the IS and Al Qaeda narrative, intensify global terrorism and erode American global dominance.

Apart from President Obama, Western democracies do not appear to have leaders with the vision required to avoid the populist rush towards self-imposed disaster. The global power balance is in rapid flux. China is rising and Russia reviving.

Courtesy: Dawn

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