Friday, 24 June 2016

Brexit Scenarios

Nat O'Connor: The UK exit from the European Union is a sad event, not least because it is highly unlikely to deliver better living conditions to people in deprived communities who voted Leave. And by demographic change alone, in ten years today's Remain camp will be the majority (but Out nonetheless).

Next comes the long process of disentanglement. It is worth considering what the longer-term scenarios might arise from Brexit, in order to avoid some plausible nasty outcomes and to steer towards some kind of positive outcome that would benefit the UK and EU, and Ireland. Just two examples follow, but much more thinking is needed of all the many complex implications of this vote.

A Rise in Racism?
It seems beyond any doubt that much of the Leave vote was a vote against current economic circumstances and a case of blaming Europe for the UK's own policies that have seen traditional industries and the welfare state decline. Many of those who blamed immigration for these issues are going to see more or less the same number of immigrants in the UK in three or four years time. And they may judge that their vote was ineffective. What then? If the referendum didn't deliver a reduction in immigration, it is plausible that we will see more violence motivated by prejudice. This is a dire scenario, but we have already seen 'Project Hate' during the referendum campaign. Much work is needed to steer clear of this scenario.

People have real concerns about access to jobs, school places, medical appointments, etc. To prevent racism festering, the UK needs to focus on the real issues of job creation in the regions and funding public services. The strong devolution of administration currently happening in England, such as to Greater Manchester, is one vehicle that could deliver this.

A Reformed EFTA?
The "Norway Option" that people have talked of is really the EFTA option, which means the UK re-joining the organisation it co-founded in 1960; and left in 1972 when it joined the then EEC.

But is the European Free Trade Association fit for purpose?

The EU member states need to make major strides towards reforming the EU and dealing with its democratic deficits; not least the unaccountable ECB. But another democratic deficit is that the countries of EFTA (currently Norway, Iceland, Switzerland and Lichtenstein) do not have a seat at the table when EU policies are being agreed. At its root, this exclusion is because the EU is a political project and EFTA is not.

The democratic credentials of the EFTA could be strengthened if it was to adopt a political function: not integrationist, but enough political cooperation among its members to be meaningfully engaged with the major challenges facing the planet. With the UK as a member, EFTA could be a substantial organisation.

Issues like climate change, human rights and terrorism impact on the economy and trade as well as on society, but they will not be addressed through mere trading relationships. A strongly democratic component is needed for more effective international co-operation, and a democratic partnership under the auspices of a reformed EFTA is a plausible scenario that could see two parallel European bodies—the EU and EFTA—working constructively together.

This is a more optimistic vision than the idea of a two-speed EU that has been raised from time to time; with the UK usually being the brake on faster integration. In the reformed EFTA scenario, the EU can get on with as much political integration as its people want, while EFTA can provides for trade and enough substantive political engagement on the big issues like climate change. A small number of other EU member states—or more plausibly potential future members—might also find a better home for themselves in a reformed EFTA.

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