It's official. The UK voted to leave the EU with a winning margin of more than a million votes, defying the odds, the polls, and the will of the markets.
The outcome comes as a surprise to nearly everyone, including one of the leading figures of the Leave movement, Nigel Farage, who confessed his own pessimism about the vote on Thursday ahead of the final results being released.
The markets also signaled their surprise (and displeasure) with the result, as global stock markets were sent on a tear downward (Japan's index was down 7.5%, for example), while safe haven assets like gold surged higher.
But on the whole, this is good news--probably for Britain because it means less bureaucracy, and likely for the EU as well, as it may soon be rid of its most intransigent member.* But the best news of all is what it portends for the EU's foreign policy.
We touched on this subject last week in our previous post on Brexit. Now that this unlikely event has come to pass, it's worth offering some specifics to flesh out this idea.
UK's National Security Policy Is Going to Get Worse
We'll start with the bad. For several years now, the UK has followed America's lead on issues of terrorism and foreign policy. Newly removed from any kind of moderating influence under the EU, we should expect their policies to become more extreme--which is to say, closer to America's. This is especially likely when it comes to questions of domestic counterterrorism policy. Here are a few examples of some of the bad ideas the UK has supported recently:
- A bill that requires teachers, including at preschool and nursery school levels, to report children with signs of radicalization.
- In league with President Obama, the UK leadership supported bombing Syria back in the 2013 after the false flag chemical weapons attack. Fortunately, David Cameron made the mistake of putting the matter to a vote in Parliament, and he lost.
- The UK subsequently decided to begin bombing Syria after the Paris Attacks
- The UK government has been an unconditional supporter (and supplier) of Saudi Arabia during the current War on Yemen
- The UK government was one of the most hawkish voices in Europe on the need for sanctions against Russian aggression, in the wake of the Ukraine crisis.
- Along with France and the US, the UK was one of the leading advocates for the disastrous intervention in Libya.
All of the above are things that have already happened. Now it's likely to get worse in the near-term because one of the primary issues pushed by the Leave campaign was the issue of immigration. That is to say, the Leave campaign wants to curtail it significantly. And to be fair, one of their arguments for this is logical; for example, they argue that the open immigration policy makes Britain's social programs (NHS, schools, etc.) financially unsustainable. (This is true, but eliminating massive social programs is a better solution than eliminating immigration.) The other argument, however, is straight from the Trump playbook--playing into prejudices against Muslims and an exaggerated fear of terrorism.
Knowing how little most people care about fiscal policy concerns (the name itself sounds boring), we must assume that the fear angle on immigration was the successful one. In turn, this suggests that the UK public's views are hardening against immigrants on the topic. That doesn't bode well for domestic policy or foreign policy in the UK.
Germany Becomes the Dominant Voice of the EU
While the unmooring of British policy may prove to be unpleasant to watch, the good news is that the more moderate voice of Germany will now be an even more dominant driver of EU policy.
The key reasons for Germany's dominance are economic in nature. Among major nations remaining in the EU, Germany enjoys the largest economy and has the lowest unemployment rate. The government is also on sound financial footing, enjoying a record-high surplus in 2015. Denmark and Sweden are also performing reasonably well, but these countries do not have the same political clout as Germany on the international stage due to their smaller size.
The only real peer competitor to Germany would be France. However, France's economy is in shambles, with unemployment rates consistently hovering around 10%, high government debt, etc. As this article from The Financial Times shows, it doesn't really matter what metric you look at; it's all bad.
When these problems come to a head in France, likely in a future fiscal debt crisis, Germany will have to be the one leading the charge to save them. So even though France might like to be a coequal partner in leading the EU, their economy will prevent them from doing so. As France has proved to be very hawkish in recent years (advocating intervention in Libya, silencing pro-Palestinian speech, enacting crazy emergency counterterrorism powers, and so on), it's probably for the best that their government's voice will remain on the sidelines.
So the Germans will come to the fore. This is cause for optimism. The Germans are not perfect noninterventionists by any means. But they have been a consistent voice of restraint. Some recent examples follow:
- German Chancellor Angela Merkel has been one of the leading voices in negotiating peace and ceasefire deals in eastern Ukraine
- German business groups are pushing for an end to EU sanctions against Russia over Ukraine
- German business representatives and ministers were among the first to reach out to Iran to begin exploring trade opportunities (which would in turn reduce the chance for hostilities later)
- German leaders have pushed back against Prime Minister Netanyahu, when he tried to claim Merkel supported Israel's actions in the Occupied West Bank. The German Foreign Minister Frank-Walter Steinmeier also endorsed a UN resolution that explicitly condemned settlements as a violation of international law, possibly signaling a shift in Germany's stance further away from Israel.
- Germany pushed for an aggressive response from the EU to assist refugees created by the crisis in Syria, and has also been one of the key peace negotiators.
- German Foreign Minister Steinmeier recently decried NATO's provocative actions along the Russian border, saying the following: "What we should not do now is to inflame the situation with loud saber-rattling and war cries. Anyone who thinks that symbolic tank parades on the Eastern border of the alliance create more security is mistaken."
The above policies paint a clear portrait of the German approach to foreign policy, one which places significantly more emphasis on peace than either the US or the UK. Additionally, Germany's leadership appears increasingly comfortable with criticizing the status quo in productive ways. This bodes well for the future.
There are good reasons to be optimistic about the foreign policy implications of the Brexit. The contrast between the UK and Germany could hardly be stronger. And while the UK will likely continue its trend towards belligerence, the solidification of Germany as the dominant and moderate voice of the EU is poised to make up for it.
*Scotland's the only one that emerges as a real loser here. Scotland recently voted down a proposal to secede from the UK, effectively deciding that they were willing to tolerate the transgressions of the government in London in order to remain a member of the EU. In yesterday's vote, every district in Scotland voted in favor of remaining of EU, further confirming this bias. But now they'll get nothing they wanted. Still not free from London, and newly on their way out of the EU. On the plus side, news is breaking this morning that the Scottish National Party is already calling for a new referendum of their own to become an independent Scotland that stays in the EU.