Brexit and the Future of the European Union

by Ewoud van Laer

On 5 May 2021 the UK government dispatched two Royal Navy patrol boats, HMS Severn and HMS Tamar, to the waters off the coast of Jersey in the English Channel. The ships were not there to commemorate the end of the Second World War in Europe but to scare off French fishermen who were threatening to blockade the port of the island, which lies just 22 kilometres off the French coast. The next day tensions rose even higher with the deployment of two French warships.

This public show of strength to protect fishing rights represents the peak to date in the battle for the aftermath of the United Kingdom’s withdrawal from the European Union. The recent months have seen many reports about lorry drivers facing endless queues to get their import and export documents approved and manufacturers unable to get parts delivered on time. The large-scale exports of coronavirus vaccines from EU countries to the UK which have helped give the country its lead in the vaccination programme remain a sensitive issue. And then there are the political tensions within the United Kingdom itself, with pro-independence parties having won the elections in Scotland and tensions rising in Northern Ireland just in time to coincide with the centenary commemoration of the political partition of the island.

It has only been a few months since the UK left the EU but it is already clear that the political and economic consequences will be considerable. That is hardly surprising if we consider that Brexit goes against the inexorable, technology-driven global integration of countries. The English – but not the Scots – proved unwilling to sacrifice political autonomy for greater prosperity. This, however, is the principle upon which the EU is based and the bloc cannot afford to accept this decision. Just imagine if Brexit turns out to be an economic success! States would be queuing up to renounce their membership. Not only might it give the Dutch an idea, but also what would the Germans’ decision be?

It is for these reasons that the recent clashes between the UK and the EU are only a prelude to what we can expect in the coming years. Supporters of further European integration, who are mainly to be found in southern Europe, will be more than willing to pay the price – if only to avoid missing out on the EU’s massive 750 billion euro Covid recovery fund. Along with Brexit this fund poses another risk for the European Union. If a large part of these billions ends up in the pockets of corrupt politicians and criminals it will undermine political support for the EU in all the member states. On the other hand, the plans for spending these resources that have been presented so far – such as the digitalisation of the public sector (including justice systems), the greening of the economy and the construction of 5G networks – look promising. Successful implementation of these plans could considerably strengthen the European project.

Ewoud van Laer is an investment manager and author of The Desperate Union: What Is Going Wrong in the European Union? (First Hill Books, 2020).