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  • Subject area(s): Business
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  • Published on: 21st September 2019
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What are the likely effects of Brexit on the European Union?

On June 23rd 2016, the citizens of the United Kingdom and Gibraltar voted to leave the European Union. This was done through a democratic referendum in which 52% of voters or 17,410,742 people chose to leave, this subsequently resulted in Article 50 of the Treaty of Lisbon being triggered. The referendum divided the nation on issues surrounding  immigration form Eastern European countries, Parliamentary sovereignty and economic   policies regarding the UKs tax to the EU. These issues were vital to the leave campaign and it can be argued that the referendum was won due to these factors. Article 50 outlines the legal process by which a member state can withdraw its membership from the European Union, which sets the clock running for the two year negotiation period. This includes negotiations about what sort of Brexit the UK wants, either hard or soft, including issues such as will the UK remain in the single market or be governed by the rules of international trade as set by the WTO. Britains departure from the European Union has currently led to institutional change within EU as it is one of the largest and most influential  member states. In addition to this Brexit will have an adverse effect on the EU’s economy, effecting trade routes and deals if a hard Brexit is agreed. It will also impact the European Unions internal political system with the reduction of MEP’s in the European Parliament there will be 73 less MEPs. In this essay, the key points that will be examined are the likely effects of Brexit on the European Unions economic, institutional and political policies.

In terms of the political effects that Brexit is likely to have on the European Union, it can be argued that Britain leaving will create an ever closer Europe. This can be achieved through more integration by the remaining 27 member states, involving issues such as a European federal army. Britain has never been part of the single currency within the EU, this currency makes it easier for countries to trade with each other. The euro is the most the most tangible proof of European integration the common currency in 19 out of 28 EU countries and used by some 338.6 million people every day. By the UK continuously opting out of the single currency it demonstrates that there was great deal of euroscepticism within Uk politics, thus could advance the eurozone as there will not as there will be less tension between Europe and the UK. Moreover, in terms of integration Brexit has removed one of the three key players from the EU, leaving France and Germany. In 2017 Macron won the Presidency election in France, beating his opposition from the Far right Eurosceptic party the National Front.This meant that the important Franco-German tandem looks set to have a pro-EU leadership for some time to come. Thereby Brexit has had a positive effect as it has created an ever stronger Europe by removing one of the three key member states that was infiltrated with euroscepticism.

Brexit will not only effect the integration of the EU but it the composition of Brussels in regards to the European parliament as 73 MEPs well no longer have seats and in terms of the EUs agenda. The UK tends to lead European discussions on antiterrorism as it has a permeant seat on the UNs security council and is the 5th biggest spender on military in the world. Therefore the EUs agenda maybe effected as on of the key influencers has withdrawn. Brexit also effects parliament, of the 73 MEPs that from the Uk 3 European Parliament committees have British chairs: Development; Internal Market and Consumer Protection; and Civil Liberties, Justice and Home Affairs. These committees are effected as new chairs will have to be found thereby replacing members with less experienced MEPs with could have a detrimental effect on the outcome of reports and findings produced. It is still uncertain how the UKs seats in Parliament will be reallocated or if the number of MEPs will be reduced to 678. However what is clear is how the composition of the major parties within the European Parliament will be effected. The social democrats would loose 20 MEPs but overall the party would be strengthened as Brexit would weaken the European Conservatives and Reformists as they would loose 21 of their 75 MEPs. By weakening the parties in parliament Brexit is creating a gap in which the ideological far right can regain seats, however this would only happen if the seats were reallocated which has not been negotiated yet. Moreover UKIPs influence in the European parliament has been severely effected as their purpose has been served. In the 2014 European elections UKIP won 24 seats which was the overall majority, 22 of the UKIP MEPs are members of the Europe of Freedom and Direct Democracy group. As Britain is leaving the European Union these seats will be lost effecting the parties electability through the loss of the infamous eurosceptic MEP and Co chair of the Party Nigel Farage. The overall likely effect that Brexit would have on the European Parliament is that it would strengthen the left, Brexit could therefore lead to a more socially democratic union which could affect the future policies of the EU.

The way in which trade is handled be between the European Union and the UK will be effected due to Brexit. One of the key economical and political issues is the port of Rotterdam. This port is the largest in Europe and is Britains gateway for trade from Europe and the rest of the world. Currently as Britain is still in there are no excess checks and balances needed when trade passes through, however the UKs decision to leave the customs union and the single market will inevitably produce frictions to trade and necessitate customs checks. Due to this factor the UK will have to negotiate new trade deals including the tariffs on Rotterdam or face have to find new routes of trade. These new deals will inevitably effect the port of Rotterdam by creating new layers beurrcay, which does not only increase congestion at the port but could also lead to higher prices of British goods sold throughout the world. Rotterdam is a key example of the political difficulties that will effect the European Union once Britain leaves in March 2019. The Dutch government's Economic Policy Analysis agency forecasts that Brexit will cost the Netherlands 1.2 percent of GDP by 2030. This could lead to the economic instability of Netherlands as it demonstrates how heavily the state relies on trade with the UK and if Britain to find new routes this would heavily effect the Danish economy.

Brexit has effected the key institutions in the European Union, due to this there will need to be key changes. There will be no Commissioner in the European Union from the United Kingdom. The British commissioner Lord Jonathan Hill, who had joined Presidents Junkers  Commission at the end of 2014 with responsibility for Financial Stability, Financial services, and Capital Markets Union, resigned after the EU referendum. This will effect the running of the commission as the other 27 member states will need to take on the roles and responsibilities of the British Commissioner. Additionally, it could be suggested that the roles held by the British Commissioner were key, therefore the change in commissioner could disturb the economic policies and stability of the European Union. Furthermore Brexit has effected the way in which the UK can vote in the European Council. The UK was due to hold Presidency in the Council in 2018 however, it was decided that the UK could not hold this position as decisions about UK trade deals would be discussed. As a result the Presidency to its successor Bulgaria, which is smaller, newer and less experienced in the EU. Bulgaria only joined the EU in 2007  therefore it is relatively new to how the process works, which can effect the outlook of the Council. It a country which is less developed that the United Kingdom in economic and military terms, it is also does have the same influence that the UK has round the world. This will effect the decision of the Council and how the rest of the world view the EU.

The English language is popular language across the European continent, it is spoken as an L2 by 38 per cent of the population and utilised on a daily basis for a plethora of reasons. With the United Kingdom leaving the European Union this may effect how the English language is utilised throughout EU. The English language is one of three key languages spoken in the EU, along with French and German. Some have suggested that as Britain triggered Article 50 there is no need for texts to be translated into English and that French should be the dominant language in the EU. Robert Menard, a member of the extreme-right National front in France proclaimed, just hours after the referendum, that ‘the English language no longer has any legitimacy in Brussels’. This is a key effect of Brexit, it demonstrates how the English language will loose its importance within the EU, it could also lead to French or German being taught as an L2 throughout the EU rather than English. This could strengthen the French dominance in the EU while weakening the position of Britain globally. Furthermore the Maltese and Irish representatives have both chosen to denounce the English language in the European Houses in choice of Maltese and Gaelic. This means that out of the 27 member states English will not be spoken as an L1. This will affect the institutions of the EU once Brexit occurs as if it is decided that English is not an official language there will be a rise in French dominance which will create an ever closer Europe with Germany. Additionally it would also effect the smaller countries in the EU that learn English as an L2 as it would result in more translators being employed and the need for further clarification between documents.

Brexit will have an economic effect on the European Union, the most obvious effect that it will have is the fact that Britain will be withdrawing its membership fees. This money goes to projects all around Europe, including developing countries in Eastern Europe. This  means that these poor could countries will loose the funding as the EU will have to decide how to redistribute the money or raise membership fees. In a study published by resetters at Erasmus University Rotterdam found that regions in Ireland face the most severe Brexit consequences. Their analysis predicts that countries closest to the UK such as Belgium and the Netherlands, as well as those with high volumes of trade such as Germany and France will suffer the biggest economic impact from Brexit. This is because the Germany relies on Britains service sector, and with Brexit there is a chance that there will be new tariffs, no single market or customs union which will have an effect of Germanys GDP. Ireland is going to be one of the most effected countries when the United kingdom finally leaves Europe. Not only does Ireland share a border with Northern Ireland, which creates problems as there will have to be a noticeable boarder with extra customs checks post Brexit, but Ireland relies on the UK for gas and oil. Ireland imports 89 percent of its oil products and 93 percent of its gas from the U.K, essentially meaning that the UK has a monopoly in Ireland over oil and gas. This is helped by the single market, however in post Brexit the Uk will cease to exist in the single market which may weaken the security of Irish energy. It could also lead to an increase in energy prices across Ireland effecting the Irish economy.

There is a fear throughout Europe that Brexit will effect the movement of people, not only through economic migration but tourism. Parts of Europe relay heavily on British tourism such as the Balearic Islands, leaving Europe means that Brits will be effected when traveling to these places. They will have to go through extra security checks in airports and in some cases gain access to visas in order to visit the country. This will likely effect the economy of the tourist destinations as the local economies are usually built on hotels, bars and tourist attractions. The Spanish region of Gibraltar will be effected once the UK leaves the EU, currently Spanish workers commute there on a daily basis for work. However it is estimated that 58.7 percent of Spanish workers in Gibraltar will be affected by Brexit. This means that during Brexit negotiations the UK will ahem to work especially closely with Spain to ensure that rights of the Spanish workers in Gibraltar are harmed. Failure to negotiate a fair deal for both Spain and the workers could result in international situation in which a referendum could occur in which the citizens of Gibraltar could decide if they want to remain part of the United Kingdom or be governed by Spain. This is only speculation, yet it does demonstrate the effect that Britain triggering Article 50 and leaving the European Union is having on the rest of Europe.

In march 2019 the United Kingdom will exit the European Union as the two year negotiation period will have ended. The exit from the EU will be one that was democratically won in a referendum in June 2016, therefore there leaving is the only eventuality as the UK is a representative democracy and government is only legitimate if it represents the electorate. Ultimately there is no way of knowing the definitive effects of Brexit until the European Union have agreed on a deal with the United Kingdom. However there are key areas in the Europe that will most definitely be effected by Brexit, policies changes and ideological shifts will occur within the European Parliament. The loss of 73 MEPs, some high profile, individuals will effect the outlook of the Parliament. Brexit will effect the economy of the EU through new trading agreements, a new tariff system will have to be implemented if Theresa May wants a hard Brexit. Leave means leave and the UK leaving the EU after it being such a prominent will internally and externally effect the way in which the institutions of the EU are governed. Ultimately Brexit will effect the institutions, politics and economy of the European Union.  

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