The Effect of Brexit on Europe – Part 2

Posted by on June 29, 2018 in Blog, Brexit | Comments Off on The Effect of Brexit on Europe – Part 2

The concluding part of our blog on how Brexit will affect the remaining states and the European Economic Community. We have seen that there are two different thoughts how the Union should go forward after Brexit, and the foreseen fear of the future dominance of Germany. In part two of this expose we look at how the United States of America will view the EU without the UK being a member.

America’s Fears

BERLIN, GERMANY – JULY 05: German Chancellor Angela Merkel and Hungarian Prime Minister Viktor Orban (not pictured) speak to the media following talks at the Chancellery on July 5, 2018 in Berlin, Germany. Germany recently reached a compromise within its government over migration policy. (Photo by Sean Gallup/Getty Images)

There is a genuine fear from America that without the firm support of the United Kingdom supporting Angela Merkel in her policies towards Russia, that the EU might cow-tie to the soviets and relax sanctions.

The USA perceived the UK as a sort of bridge between continental Europe and themselves, and the UK was a pro-active supporter of American policies in the European Union’s thinking towards Russia, with Ukraine still a hot potato. The EU have several headaches at the moment with Brexit only being one. The Greek economy crisis has still not properly been resolved and the whole refugee situation is becoming a nightmare. The U.S is concerned that the Brexit talks which look like taking five years or so to handle will leave the EU vulnerable.

Perhaps the Canada Option is the Answer

One of the main reasons the UK opted out of the European Union was the free movement policy, Britain saw the growing refugee problem in Continental Europe and the increase of terrorist attacks due to the relaxing of border controls.

In effect the citizens of Britain wanted their borders more secure, but the EU is stating that if the UK want to retain a single market advantage they must adhere to the free movement policy. So, there is an inherent impasse. One option out of this impasse would be the Canada Option, meaning a simple free trade agreement, which would give limited access to the UK to the single market. This would be disastrous to the City of London, as this agreement would not allow free business access to the EU unless it was regulated by a third body. Already London is seeing a number of foreign banks leaving and relocating to other European states.

It is in the EU’s interests that the UK remains economically close as it is also a massive market to many European States to sell into. But the European bureaucrats will not negotiate on core principles, and one of them is the free movement of labor, which is the fundamental difference between the two sides. Brexit is not good news for both the UK and the European Union, it was an emotional decision made by the British public in a referendum that was fueled by terrorist attacks and the wave of refugees making their way to the shores of the UK.

The biggest problem for the UK is that the EU is not likely to be lenient in any negotiations, in fact the very reverse, as they will want to make an example of them to deter other states with the same ambitions. But the fallout for the Union may also be just as unpleasant, as a power struggle will be definitely on the cards.