war on the rocks

The Security Costs of Brexit and What to Do About It

June 27, 2016

Last week’s vote in the United Kingdom to leave the European Union not only reflects the country’s history of globalization and suspicions of continental domination, but also discontent with unaccountable and out-of-touch elites. Fewer people remember the horrific events of the two world wars and the Cold War which provided much of the impetus for integration. The victory of the “Brexiteer” campaign is indicative of a growing trend of agitation against the establishment in both Europe and the United States. If what we saw in Britain heralds a trend, this could be the beginning of a shift away from the integrated economic and security institutions that have been the bedrock of global stability since the end of World War II. More immediately, the European Union will be weaker at a time when Russia is resurgent. The United Kingdom, United States, and European Union need to take steps to ensure Brexit has a minimal negative impact on international security.

The worst-case scenario for security in the wake of the Brexit would be an isolationist Britain that retreats from the entire world, not just the European Union. NATO with a less-engaged Britain would be severely weakened. A United Kingdom with an even smaller defense budget would be unwilling and unable to deploy forces to deal with transnational threats. Consequently, a diminished European Union could fall into internecine squabbling about the way ahead. Unhampered by a solid Euro-Atlantic front, a resurgent Russia could continue its efforts to build a de facto buffer zone in Eastern Europe at the expense of NATO members and partners. Even progress toward a global structure of free trade, democracy, and human rights risks slowing, stopping, or even being reversed. Luckily, none of this need come to pass. If all parties adopt a proactive stance, they can reassure Europe and other British allies and partners around the world and minimize the potential impact to global and regional security.

The main dangers are economic and political. London accounts for 78 percent of European Union foreign trading, and 44 percent of British exports go to the European Union. Foreign direct investment in the United Kingdom is $1.5 trillion. Even if a bilateral trade agreement between the European Union and Britain is reached, those numbers are still likely to decline. Once Britain exits, it will need a new trade treaty with the European Union. Perhaps more importantly, Britain will no longer be a party to the international trade treaties that the European Union has negotiated.

Politically, a Brexit will cause a shift in power dynamics. Both a United Kingdom that becomes isolationist and a European Union that treats the Brexit vindictively would have a negative effect on the European balance of power, and both would have global repercussions. This marks a fundamental power shift in the internal dynamics of the European Union, in which power used to be brokered by the partnership of France and Germany with Britain playing a balancing role. The European Union will become even more dominated by Germany, which gains an economically and politically dominant position as the United Kingdom departs and France is prostrate in the face of their economic challenges and international terrorism. Countries outside the monetary union, like Sweden, will lose their chief advocate.

Another political issue is a potential upsurge of referenda. At the European level, countries such as Denmark, France, Greece, Hungary, the Netherlands, and Sweden could be next. Pew polling shows that less than half of the populations of Spain, France, and Greece have a favorable view of the European Union, and the majority of populations in many countries disapproves of its handling of refugees. Majorities in Italy and Sweden and pluralities in the Netherlands and Hungary disapprove of how Brussels has handled economic issues. Additionally, other countries will see their regionalist movements strengthened, which could lead to more internal referenda for independence in places like Scotland and Catalonia.

The lack of political focus that may result from this referendum at the European level makes it difficult to deal with issues challenging the continent. Coherent Western policy responses to common challenges become more difficult, as the European Union will be less able to deal with problems such as Ukraine, Russia, migration, refugees, and counterterrorism. If Brussels backpedals on Ukraine-related sanctions, Russia will be freer to operate in Eastern Europe and indulge in further international adventures. The global effort against terrorism will also be weakened. As prime minister, David Cameron has been one of the strongest supporters of the fight against Islamic extremism. His replacement will have to cope with internal issues and negotiating a velvet divorce with the European Union, leaving less high-level attention for anything else. Though no one in Britain is clamoring for a withdrawal from continental affairs (with the possible exception of Jeremy Corbyn), it is nonetheless likely that in the short term foreign policy issues such as counterterrorism and deterring Russia will be pushed to the back burner. The political reordering of both the Labour and Conservative Parties and the lack of strong parliamentary leadership means that, for the time being, Britain’s government will lack a credible helmsman capable of promptly and coherently dealing with emerging national security crises. Additionally, it is likely that any potential successor government will be focused primarily on managing the Brexit’s economic fallout and renegotiating favorable trade ties with the European Union. Given this turbulent economic and political climate, renewed engagement abroad will likely be a secondary priority.  Another second-order effect of diminished United Kingdom influence in Europe will be less U.S. influence in the European Union.

A third, but lesser risk is military. First, the E.U. Common Security and Defence Policy (CSDP) will be much harder to maintain, much less improve upon. A Britain that makes the mistake of diminishing all international efforts — ould also hurt Western efforts in the Middle East and Afghanistan. It could also weaken NATO at a key time, as Russia continues to wage “political warfare” against Eastern European countries, NATO members, and the alliance itself. A United Kingdom damaged economically by the Brexit could also continue the trend toward falling defense budgets, further weakening not only NATO, but also the global coalition of the willing.

In the near term, it is likely that the Brexit vote will be extremely destabilizing for the future of the European Union, NATO, and the world economy. However, several steps can be taken to mitigate the hazards of Britain’s withdrawal. The majority of this work is diplomatic and informational.

First and foremost, it is imperative that Britain remains engaged in Europe, NATO, and across the world. Britain’s continued active participation in NATO is more important than ever in deterring Russian adventurism in Eastern Europe. Britain’s financial and military contributions to NATO cannot be abrogated. This should be accompanied by a comprehensive fiscal plan to ensure an economic and political “soft landing” for Britain’s exit and continued British diplomatic engagement abroad. Brexit does not mean that Britain can afford to separate itself from the continent.

For the European Commission itself, the Brexit vote serves as a wake-up call that should provoke a review of its own governance policies. In the short term, EU leaders should be very conscientious to avoid being seen as vindictive and “punishing” the United Kingdom for leaving. The European Union should also avoid any attempts to strengthen the “ever-deeper union” in the wake of the Brexit vote. Doing so is both dangerous and infeasible, and it would likely contribute to further political fragmentation across European democracies. Instead, it would behoove leaders in Brussels to increase transparency and accountability. Bolstering the European Union’s flagging legitimacy would provide an effective counter-message against radical political factions and would ensure that the European Union remains a viable alternative to Russian revanchism in Eastern Europe.

Washington needs to rethink its approach to Europe. In response to Russian adventurism after the United States pulled combat forces out of Europe, Washington is now rotating additional forces through Eastern Europe and preparing to lead one of four multinational battalions in the Baltics and Poland (the U.K. will lead one of the other battalions). Although this is laudable, NATO and the EU will need more from the United States. Considering that U.S. influence will be diminished in Europe, the United States needs to step up and reassure European partners. Militarily, this means continuing to bolster U.S. troop presence in eastern Europe and cooperation with alliance partners. The United States must also send an economic message that it will be heavily invested in Europe regardless of the status of the European project. This would entail cutting a free trade deal with the United Kingdom or even inviting them to join NAFTA in addition to completing negotiations for the Transatlantic Trade and Investment Partnership. The United States should also consider asking the British to commit more to NATO as a demonstration of continued international engagement. This could be the price Washington demands from London for placing them at the front of the queue for a new free trade deal. For the past two decades, the European Union’s political and economic stability have offered a credible alternative to Russian hegemony. Ensuring continued American commitment to European prosperity and stability will ensure that this model remains viable.

 

Dr. Alex Crowther is a Senior Research Fellow at the Institute for National Strategic Studies at the National Defense University specializing in NATO and European issues as well as cyber policy.

Kieran Green studies at Tufts University. He currently works as a research intern at the Center for Technology and National Security Policy (CTNSP) at National Defense University.

These opinions and views do not represent those of the National Defense University, the Department of Defense, or any part of the U.S. government.