Brexit or Bremain? The Post-Referendum Plan

What happens after Britain’s vote on whether to stay in the European Union? No matter what the outcome, politicians from Britain and Germany warn that the 28-nation bloc will go through some fundamental changes.
Former Conservative Party leader and staunch Brexiteer Iain Duncan Smith spoke at the YouGov event in Berlin.

Germany’s deputy finance minister wasn’t about to show his cards when asked in a room full of people and reporters exactly what Berlin’s contingency plans are if Britain chooses to leave the European Union later this month.

“If the German government had plans for what to do after, I wouldn’t tell you now,” quipped Jens Spahn.

And yet, Britain’s relationship with the European Union will change fundamentally after the country’s referendum on E.U. membership is held on June 23. Those changes are coming regardless of whether Britain votes to leave or to stay in the 28-nation bloc, German and British politicians warned at a forum hosted by YouGov in Berlin on Tuesday.

Britain isn’t likely to get an easy ride from the rest of the European Union if it chooses to leave. That much Mr. Spahn did make clear.

“There’s always a difference if you are being part of the family, or just a neighbor,” said Mr. Spahn, a member of German Chancellor Angela Merkel’s Christian Democratic party. He argued that Britain should not expect to get a simple free-trade deal in place of E.U. membership if it votes to leave.

Mr. Spahn’s comments are the latest in a high-stakes sparring match being played out in European capitals ahead of the referendum, centering on what happens after the vote.

If Britain decides to leave, the one thing that will not happen is that everything will go on as normal. Katarina Barley, General Secretary of German Social Democratic Party

British campaigners in favor of “Brexit” argue that, when all is said and done, Brussels will be eager to get a deal done quickly to avoid uncertainty toppling the entire European economy.

If Britain votes to leave, “I believe that the European Union will genuinely want to sort this out,” said Iain Duncan Smith, the former leader of Britain’s Conservative Party and now one of the leaders of the Brexit campaign. “We don’t live in a game of child’s playground… let’s get something sorted on this and behave like adults.”

But many in Brussels and Berlin argue it’s not that simple. Negotiating an exit from the European Union, which would mark the first time that a country has sought to leave the bloc, would take at least two years and probably longer as the two sides iron out a whole range of complex issues, politicians and analysts said.

Katarina Barley, general secretary of Germany’s Social Democratic Party, said a quick and painless deal for Britain could encourage other E.U. nations to leave the bloc.

“In the interests of the European Union, this is definitely something that we cannot agree on,” said Ms. Barley, who will be leading the left-leaning SPD’s 2017 election campaign. “If Britain decides to leave, the one thing that will not happen is that everything will go on as normal.”

That danger was born out by YouGov’s latest survey released Tuesday, which found that broad majorities across the seven European countries polled believed other countries would likely exit the European Union if Britain left.

The poll also found that German and French citizens would expect Britain to continue contributing financially to the bloc, or allow E.U. workers to move freely to and from Britain, even if the country left. British voters have rejected that suggestion, pushing instead for a simple free-trade deal.

 

A Long Negotiation Ahead-01 Brexit poll

The trouble is that Britain is not the only country that believes the European Union has failed to live up to its potential. After years of a damaging debt crisis and recent bickering over how to handle increasing migration, the reputation of Brussels is in tatters across much of the continent.

YouGov’s poll found that, while citizens of other E.U. member states still broadly support their country’s membership, they also believe the bloc’s institutions are “wasteful,” “arrogant” and “dishonest.” The E.U.’s only solace may lie in the fact that citizens felt only slightly better about their own national governments.

“It isn’t only the ‘crazy’ British who are raising this question [of reform] but every country in Europe,” said Stephan Shakespeare, the chief executive of YouGov, while presenting the latest survey results at Tuesday’s forum.

Even if Britain chooses to stay in the European Union, politicians on both sides of the Channel made clear that some fundamental changes will be needed to how the bloc operates – and how the European Union is perceived.

Alexander Graf Lambsdorff, vice president of the European Parliament, said Germany could use Britain as an ally in pushing for deeper reforms of the European Union in the coming years. While he argued that Britain leaving was a possibility, he warned that a British exit would make it that much harder to restore the bloc’s reputation in the coming months and years.

"The European Union is imaginable without the United Kingdom. It’s not the end of the world should they decide to leave… but do I want them to leave? Hell no!” said Mr. Lambsdorff, a member of Germany’s liberal Free Democratic party.

“The U.K. economy is the mother of liberalism,” he added. “They are a wonderful country. We want to keep them in as liberals.”

 

Mr. Spahn, the German deputy finance minister, also argued that Britain had actually contributed to a rethink of how the European Union carries out its business over the last few years. He pointed to reforms that have led the E.U. executive arm, the European Commission, to actually hand some powers back to the member states.

“There are so many right arguments and proposals from the British government when it comes to European Union reform,” Mr. Spahn said, arguing that Britain was right to question how the bloc deals with social welfare, migration, its budget and even to challenge the E.U.'s mantra of always aiming for an “ever closer union.”

The trouble, Mr. Spahn said, was that the E.U.’s core is “not going to listen” while Britain is considering leaving the bloc. That might change if Britain becomes a more constructive member and aims to reform the organization from the inside, he suggested.

Stephen Kinnock, a parliamentarian from Britain’s Labour Party and supporter of the “remain” campaign, said blame for the European Union’s poor reputation lay at the feet of all European capitals that have often used Brussels as a punching bag for domestic challenges.

“The E.U. has become a victim of its own success,” Mr. Kinnock said, with much of the incremental economic progress brought by the bloc over the past few decades being taken for granted by the public and politicians. Brussels “has had no champion in any of the European capitals” over that time, he added.

In that sense, one good side of the British referendum is that it has forced supporters of the European Union to make the case for the bloc, Mr. Kinnock said: “For the first time in decades, a set of positive messages has emerged about what we’re doing in the European Union.”

He added that any momentum gained from a “remain” vote on June 23 would evaporate unless supporters of the European Union can find better ways to highlight the benefits that Britain gets from being a member.

That sentiment was echoed by Gunther Krichbaum, who leads the German parliament’s committee on the European Union. The bloc’s single market for goods and services – the largest in the world – and even the free movement of labor between its 28 nations had actually brought benefits to members over the decades, he noted.

“The European Union could be a little more self-confident. It has a lot of things to offer,” he said.

 

Christopher Cermak is an editor for Handelsblatt Global Edition covering finance, economics and politics. To contact the author: [email protected]