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Institute of Economic Research Working Papers
No. 57/2017
Changes in perception of European integration after
Brexit
Andżelika Kuźnar, Jerzy Menkes
Article prepared and submitted for:
9th International Conference on Applied Economics Contem-
porary Issues in Economy, Institute of Economic Research,
Polish Economic Society Branch in Toruń, Faculty of Economic
Sciences and Management, Nicolaus Copernicus University,
Toruń, Poland, 22-23 June 2017
Toruń, Poland 2017
© Copyright: Creative Commons Attribution 3.0 License
2
dr Andżelika Kuźnar (SGH)
prof. dr hab. Jerzy Menkes (SGH)
andzelika.kuznar@sgh.waw.pl
Warsaw School of Economics (SGH), Al. Niepodległości 162, 02-554 War-
szawa
Changes in perception of European integration after Brexit
JEL Classification: F14; F15; F53; K33
Keywords: Brexit; European integration; transatlantic relations
Abstract
Research background: UK rejects the paradigm of the role and rank of the se-
curity community and the perception of European integration as a road of no re-
turn. Economic and legal study allows to assess the reasoning of Brexit and future
regime of EU-UK relations.
Purpose of the article: To assess changes in perception of European integra-
tion due to Brexit and to determine its geopolitical and geo-economic consequenc-
es. The reasons of such purpose: the evolving structure of the UK, persistent trends
of separatism in the UK, geographical differences in attitudes of UK citizens to
Brexit.
Methods: The research is an interdisciplinary economic and law study. The au-
thors use: economic and legal methods applicable to the research. Conclusions are
formulated on the basis of the synthesis of the results and approximations.
Findings: Brexit changes the perception and attractiveness of European inte-
gration. Weakening of Britain’s ties with EU Members will have a significant
impact on the strength of European identity. Brexit will weaken the European pillar
of Atlantic Alliance. Brexit will be a factor of permanent disintegration of UK.
Introduction
In a referendum on the UK’s membership of the European Union held
on 23 June 2016 there were 51.9% votes to leave the EU and 48.1% to re-
main in it (turnout was 72.2%). Although the referendum was not formally
binding, the government decided on withdrawal from the EU. The decision
3
was based on authorisation by an Act of Parliament. The parliaments of
Northern Ireland, Scotland and Wales were not consulted on the matter.
The outcome of the referendum was not evenly distributed across the
UK. Wales and England voted to leave EU, while voters in Scotland and
Northern Ireland preferred to stay in EU. Every local authority area in Scot-
land voted for ‘Remain’, while every English region (except London and
Gibraltar) was for “Leave” (Menon & Fowler, 2016; Goodwin & Heath,
2016).
Table 1. Proportion of the votes on referendum of UK’s membership in EU
Leave
Remain
England
53.4%
46.6%
Wales
52.5%
47.5%
Scotland
38.0%
62.0%
Northern Ireland
44.2%
55.8%
National result
51.9%
48.1%
Source: Uberoi, E. (2016).
It is the results of the national referendum and regional differences with
regard to it that brought us about to research on what changes in the percep-
tion of European integration it causes. The implementation of the will of
British citizens expressed in June 2015 will have far-reaching and difficult
to predict effects in many areas. We focus on changes in the perception of
European integration as a road of no return. We analyse the legal regime of
Brexit and its possible influence on UK’s disintegration. Economic and
legal study allows us to assess the reasoning of Brexit and future regime of
EU-UK relations.
Method of the Research
The research is an interdisciplinary economic and law study. We use:
economic methods – quantitative and qualitative analysis of socio-
economic indicators related to UK’s membership in EU; legal methods
applicable to the research of international institutions using institutional and
functional approaches. Conclusions are formulated on the basis of the syn-
thesis of the results and approximations. This interdisciplinary nature of the
research is an element of novelty of the research.
Internal perspective of analysis of the effects of Brexit
There are several perspectives of Brexit which can be analyzed. Firstly,
from the standpoint of affected entities there may be internal (domestic),
European (EU), or international points of view of an analysis. Secondly, the
4
issues that need to be regulated due to Brexit can also be examined (such as
for example whether the referendum is the right form of direct democracy).
We limit our analysis to the internal perspective of the UK (we do not
deal with other countries’ domestic perspectives, European or international
ones1).
The UK “case” is understood as a process which led to the national ref-
erendum on the UK’s membership of the EU. The main personalised actors
of this process (i.e. politicians, not the society) did not expect the actual
outcome of it. Both the politicians/parties calling for a vote in favour of
remaining in the EU and those urging to vote against awaited benefits of a
referendum resulting in a decision to stay in the EU (more about the politics
of Brexit: Jensen & Snaith, 2016). Just the announcement of referendum
improved UK membership conditions and secured some significant conces-
sions from EU partners (EU Referendum…, 2016). The referendum was an
opportunity to create new social groups, parties and new leaders. It was an
attractive perspective for both challengers2 and “old” leaders expecting to
confirm their position (and, in fact, strengthen it, since the new competitors
are less experienced3).
Equally interesting is the issue of UK’s legal framework of Brexit and
creation of a new British legal order (i.e. preserving/changing the acquis).
The challenge is to place UK in a new economic and political network of
relations in Europe and in the world. Great Britain will be a new state in
international economic relations that has to create a new legal framework
(e.g. of bilateral agreements) which will replace the current EU policies.
The scale of challenges is difficult to imagine, because the British ex-
pectations may be far greater than the possibilities, and the “Norwegian
model” is a nebulous one (Honley, 2016). Difficulties arise in political rela-
tions too, as the UK will not officially become a new state – it will, for
example, continue its status in UNSC as a permanent member– but for
many years British policy has been defined and implemented in the EU
CFSP formula.
1 From the EU point of view, both future relations with UK and the impact of Brexit on
the European integration are important. The spectrum of possibilities in the second case is
wide: from deepening of integration to disintegration of the EU. Of course, the extreme
scenario will not occur.
2 Such as B. Johnson (Ministry for Foreign Affairs) whose promotions for years were
blocked by a petrified political system.
3 D. Cameron could count on it. His position in both the (conservative) party and na-
tionwide would have strengthened in case of the failure of Brexit. He would become the
Prime Minister who not only was successful in renegotiating the terms of the EU member-
ship (like M. Thatcher), but who also respects citizens by asking the public for their opinion.
5
Irrationality of British decision to leave the EU
The referendum campaign of proponents of UK remaining in the EU
was based on warnings of economic risks of leaving the EU, rather than the
benefits of membership. At the same time, the political and economic situa-
tion affected by the financial and refugee crises, as well as the efforts to
prevent Greece from leaving Eurozone has created a favourable ground for
the populist Eurosceptic campaign (Menon & Fowler, 2016).
Some social indicators (figure 1) show that, contrary to believes popular
in Britain, the standard of living in UK has dramatically improved since its
accession both in absolute terms, and relative to other EU Member States
(MS)4. Some indicators also show the advantage of UK results over U.S.
Obviously, the EU membership has been just one of the factors that enabled
positive changes, but no doubt it has been among the most important ones.
Figure 1. Socio-economic indicators of standard of living in UK compared to
selected EU countries and USA
4 The sample of countries vary depending on data available, but in general is limited to
Germany, France and Italy, i.e. the largest EU MSs.
0
10000
20000
30000
40000
50000
60000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
GNI per capita (current USD)
United Kingdom Italy Germany France United States
6
0
2
4
6
8
10
12
14
16
18
20
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Unemployment (% of total labor force)
United Kingdom Italy Germany France United States
0,7
0,75
0,8
0,85
0,9
0,95
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
HDI
United Kingdom France Germany Italy United States
0
10
20
30
40
50
60
70
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Tertiary education - gross enrolment ratio (%)
United Kingdom France Italy
7
Source: own calculations based on World Development Indicators. Retrieved from:
http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators
(11.02.2017).
The legal basis of leaving the European Union
The decision to leave an organisation should be long-term and – as in
case of accessing it – based on striving for sustainable benefits. The deci-
sions to leave either express individual dissatisfaction with the membership
of the organization or general, negative evaluation of the organization's
activities. Analysis of instances of exits from organisations indicates the
overriding value of the political factor of the decision. It also proves that
they are elements of searching for confrontation, not compromise. Howev-
er, there is no doubt that further membership in the organization may be
0
5
10
15
20
25
30
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Infant mortality rate (per 1,000 live births)
United Kingdom Italy Germany France United States
0
2
4
6
8
10
12
14
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
CO2 emissions (metric tons per capita)
United Kingdom Germany France Italy
8
considered by the state as an undesirable limitation of the choice of strategy
or tactics. It should be remembered that the raison d'État is guided by the
statement: “We have no eternal allies, and we have no perpetual enemies.
Our interests are eternal and perpetual, and those interests are our duty to
follow”5 (Hansard’s Parliamentary Debates).
Nevertheless, countries avoid the decision to exit an organization. Any
such a decision is final, and – according to Benjamin Disraeli – Finality is
not the language of politics (Cohen & M.J., 1973, p. 140)6.
In order to reduce the costs of decisions to leave an organisation, the
statutes of some of them facilitate the process, e.g. in a situation of dissatis-
faction with changing the statute of the organization. However, the statutes
often do not regulate the legal framework of the leave. In such a case, the
right to leave is confirmed by Art. 56 of Vienna Convention on the Law of
Treaties. This solution neither prevents leaving nor controversies related
with the whole process. The controversies may be avoided when a termina-
tion clause is included in the organization's statute. These clauses most
often provide for the mode of termination of an agreement and set a date
for the effectiveness of such a statement.
Regulations concerning leaving the EU (its predecessors) were chang-
ing. The Treaty of Paris establishing the ECSC did not regulate the issue of
leaving the Organization. It was concluded for a period of 50 years (Art.
97). The EEC and Euratom treaties did not mention neither the issue of
leaving the Organisations nor the period of their existence (they were con-
cluded for unlimited time).
It has been, rightfully, assumed that membership in the Communi-
ties/EU creates such deep connections in all the areas of integration (point
of no return) that it is difficult imagine – due to costs – a unilateral decision
of a MS to leave the Organisation.
In response to the emerging allegations of anti-European politicians
that the EU cannot be left, and the quiet fears of “wild” exits, the Treaty on
EU introduced a provision of Art. 50 sec. 1 providing for the right of each
MS to withdraw from the EU in accordance with its constitutional require-
ments. It also regulates the mode of departure (sec. 2–4), which is quasi-
inverse of the accession process. According to this regulations, the proce-
dure commences the notification of the intention of withdrawal by a MS to
the European Council. It then provides guidelines for the EU negotiations
with that State, “setting out the arrangements for its withdrawal, taking
account of the framework for its future relationship with the Union”. The
5 Lord Palmerston’s speech to the House of Commons on 1.03.1848.
6 Speech in House of Commons on 28.02.1859.
9
agreement regulating all issues relating to withdrawal is concluded on be-
half of the Union by the EU Council, after obtaining the consent of the
European Parliament. The actual date of leaving the EU is the date of entry
into force of the withdrawal agreement or, if that was not possible, 2 years
after the notification, or later if the European Council, in agreement with
the MS, unanimously decides to extend this period. If the MS changes its
mind and asks to rejoin, its application request is subject to the general
procedure of Art. 49 TEU.
On March 29, 2017 The UK Prime Minister has started the legal proce-
dure of UK’s withdrawal by notifying the European Council in accordance
with Art. 50. Conclusion of the withdrawal agreement may take a maxi-
mum of 2 years. The negotiations may cover legal framework of future
relations, so the deadline will be extremely difficult to meet. Difficulties are
mounted by the difference in attitudes: the EU side opts for non-combining
terms of withdrawal and future trade relations, while the British want sim-
ultaneous negotiations on these two matters7. Michel Barnier, a former
French minister and European Commissioner who is the EU’s chief Brexit
negotiator announced the conclusion of the negotiations at maximum 18
months, reserving the remainder for the remaining procedures (Crisp &
Tampest, 2016, Barnier, 2016).
Between Brit-in and Br-exit
The UK was admitted to the ECs in 1973. Since EFTA appeared a fail-
ure, the UK managed to obtain the French approval for ECs membership.
The UK later paid political price for this consent, accepting the unequal
status. Franco-British relations in the Communities have never reached
deep level of trust and cooperation. The situation was worsened by the fact
that the UK was acting in the Communities as a guest who voluntarily joins
the party when the main dish is already on the table and decides to change
the menu, rearrange the table and change the seating of the guests. The
British occupied the main economic and world politics table as a member
of the Communities too often demonstrating separateness from Europe and
dissatisfaction with the membership.
The situation for both parties was uncomfortable. The continental mem-
bers of the Communities were aware that exit of the UK from the EC would
7 “We believe it is necessary to agree the terms of our future partnership alongside those
of our withdrawal from the EU”. Prime Minister’s letter to the European Council. Retrieved
from:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/604079/Prim
e_Ministers_letter_to_European_Council_President_Donald_Tusk.pdf (30.03.2017).
10
harm integration much more than its non-accession and the British were
aware of the lack of choice. The British Government has decided to renego-
tiate the terms of membership.
Since 1974 the UK has contested both the expenditures on Common
Agricultural Policy (CAP)8 and the difference between the British contribu-
tion to the budget and the receipts. As a result of decisions taken at the
European Council summit in Fontainebleau in 1984, the UK’s financial
contribution to the EU budget has been reduced. Other members agreed to
bear the financial consequences of UK’s rebate on VAT payments (Grum-
bling about le cheque britannique in France rivals UK antagonism to the
CAP – Begg, 2016, p. 44). This rebate was the subject of constant disputes.
Opponents raised the issue of reduction of EU spending on the CAP and the
improvement of the UK’s economic situation. Supporters pointed to a per-
sistent difference between expenditures and receipts from EU budget.
Brexit as a factor of disintegration of UK
Yet another issue related with Brexit is Scotland’s future relations with
the EU. There is no doubt that Scotland can – if it so wishes – become a
member of the EU when it becomes an independent “state”. Obviously it
fulfils all Copenhagen criteria. The accession negotiations can be quick and
easy, which does not mean hassle-free.
One of the direct technical problems is the relationship of potential
Scotland’s statehood with the British statehood in association with Scot-
land’s EU membership. The previous cases of “exits” from the EU9 do not
allow for making predictions about Scotland’s case. The only matter com-
mon for all these cases is that states want to leave the EU in such a way that
they still want to “stay”, because the basis for their decisions are ad hoc
political calculations rather than substantive arguments (e.g. considering
economic interest). This is undoubtedly due to the fact that the alternative
to membership is out of EU area, out of business/market. What differs the
current exit from the previous cases is that (new)UK will be recognized as
the continuator of (old)UK, while Scotland will be a new state – a recog-
nized international body. However, the UK is departing from the EU, and
the new state cannot be a continuator or a successor of membership.
8 The expenditures on CAP were reaching up to 70% of EU budget till the reform in
2000, since then they have decreased to 40% and are set to continue falling to 33% in 2020.
In 2016 they amounted 38% (55 billion euros). See: (EU annual budget…).
9 The EU does not have a full-fledged experience of leaving the Organization. There are
some similar cases, namely Greenland, Guadeloupe (or more precisely Saint-Martin and
Saint-Barthelemy) and with respect to all the differences – Norway.
11
The message about Scotland’s independence is a separate issue. The EU
and the US do not support any separatism seeing them as a threat to stabil-
ity. They are even more reserved in this case as one of the pillars of the
Atlantic alliance and the security community could be threatened. Undoubt-
edly, the promise of automatic membership in the EU would support the
backers of Scotland’s independence, as the vote “for” in the independence
referendum would be a vote for maintaining the status quo (stay in the EU)
and not for the travel to the unknown (to independence).
But the circle of recipients of this message is not limited to UK and
Scotland. The first, but not direct, addressee is Catalonia, which the EU, in
cooperation with Spain, wants to warn against the independence that will
lead to the need for applying for EU membership, which Spain can block
(as the unanimity is required).
Conclusions
Brexit changes the perception of European integration as a road of no
return and its attractiveness. The UK rejects the paradigm that the security
community is a source of prosperity and security. Brexit is in line with the
letter, but contrary to the spirit of European’s treaties. Brexit, irrespective
of the EU-UK regime, will affect transatlantic order and western hemi-
sphere. The weakening of UK ties with the EU will have a significant im-
pact on the identity of Europe and its external perception. Brexit will also
weaken the Atlantic alliance.
In the long run, Brexit will weaken UK integrity, even if Scotland does
not become independent. In case of breakup of UK, the consequences will
be more far-reaching and difficult to predict. At the same time, we consider
the scenario of Scotland’s accession to the EU after gaining independence
as highly probable. It is supported by the coherence of the Scottish support-
ers of independence with economic interests of the state.
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