EU After Brexit: The Future of UK’s Legacy

The British played a crucial role in the European Union as advocates for market liberalization and efficient regulation, transparent and accountable bureaucracy, and widening market access. Their fingerprints can be found on the completion of the internal market, the reform of the European Commission, the expansion to Central and Eastern Europe, and the continuing focus on the western Balkans and the eastern Mediterranean.

Of course, other Member State governments also played a role in these ventures; so did policy entrepreneurs within the European institutions. Still it would be hard to imagine a European Union shaped as it is without British influence. That difficulty makes it worth wondering how the European Union will continue to develop now that the British are leaving. The answer lies in the strength of path dependence, the balance of power and priorities among the remaining Member States, and the continuing influence of both the British government and the United States.

Institutional Inertia

The legacy Britain will leave the European Union will endure long after Brexit. The reason is that it is much easier to maintain institutions than to create them. This is the insight the American political scientist Robert Keohane used to explain the persistence of an American-inspired global economic arrangement Beyond American Hegemony. Britain was never hegemonic in Europe, but the principle remains the same.

Europeans will continue to rely on mutual recognition to smooth the setting of voluntary industrial standards; they will continue to resist aggressive tax harmonization; and they will continue to support the rules for market competition and state aids. By the same token, the European Union is unlikely to develop a coherent system for national champions or even a reasonably effective industrial policy. Meanwhile, English will continue to be spoken in the European institutions, the Commission will continue to restrain the pace of regulation, and while there may be a moratorium on new accessions to membership, it is hard to see how any of the existing candidate countries will be openly forsaken – including Turkey.

Again, the point is not that Britain alone was responsible for these things, it is only that the sudden loss of Britain as a Member State is unlikely to make the things the British government advocated suddenly go away. British power may be absent but British purpose remains.

Like-minded Europeans

Indeed, much of that purpose was never wholly British. Here it is worth remembering just how hard the governments of Belgium and the Netherlands worked to ensure that Britain joined as a Member State – and how much influence Britain had on the participation of other countries like Ireland, Denmark, Sweden, and Finland. The governments of these countries shared many British policy preferences for their own reasons. It is also worth recalling that British support for enlargement was hardly borne of altruism; the countries of Central and Eastern Europe, and the Mediterranean countries like Malta and Cyprus also shared many of the British government’s preferences. Among those preferences was a desire to widen the scope of membership enough to dilute the central role of France and Germany at the core of the European project. The British government may be necessary to stymy a Franco-German condominium in a Europe of nine, twelve, or even fifteen, but it is no longer necessary in a Europe of twenty-seven.

A chance conversation in the Dutch foreign ministry shortly after the British referendum on membership provides a good illustration. A senior Dutch foreign ministry official lamented that his government would no longer find it easy to work behind British opposition to one or another Franco-German agreement. Britain’s departure would not change Dutch preferences, but it would make the Dutch government a more visible source of opposition to Franco-German leadership. The worry at the time was that this would result in awkward pressure coming to bear on the Dutch government.

That turned out to be true. Nevertheless, Dutch Prime Minister Mark Rutte was willing to accept the challenge. He organized a loose coalition of other smaller Member States to support his ambitions to restrain the growth of European Union fiscal resources and to see the Commission play a more direct role in economic management. This Dutch position complicated Franco-German efforts to agree on a more sweeping reform of European macroeconomic governance. The British were not necessary for Dutch success.

External Threats

If there is a scenario in which Britain’s legacy is compromised or diminished, that scenario depends less on internal power dynamics than on external influences. It is easy to see how the European Union would continue to evolve along British preferences if the United Kingdom remains tightly integrated in the internal market. The British government will not have a seat at the table with the Council of the European Union decides on legislation, but European firms operating in the wider European marketplace will continue to advocate in favour of enhanced liberalisation, efficient regulation, and even wider access. If somehow the US government were to put the transatlantic trade and investment partnership back on the table, then this tendency toward free market principles would only be enhanced.

By contrast, if the British government opts out of the rules on market competition and uses state aids to give its firms a competitive advantage, that will push in the opposite direction. The same would be true if the British government chooses to rely on regulatory divergence to create effective non-tariff barriers to trade. A more effectively interventionist and protectionist Britain would encourage greater intervention and protectionism in the European Union. A more effectively protectionist British government that tied itself closely to the trade policies and market rules pursued by the United States, would strengthen the tendency in the European Union to look for ways to promote European industrial champions and to find non-market instruments to promote European economic interests.

In this sense, Britain’s legacy in the European Union will be greatest if the British government pursues greater cooperation after Brexit. If the British government moves aggressively to compete with the European Union, Britain’s legacy will be diminished. Britain will inadvertently undermine its own allies within European institutions while at the same time chipping away at the policies successive British governments worked so hard to initiate and encourage. Britain played a crucial role in making the European Union; the British government can also play a role in the European Union’s unmaking.