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On Thursday, voters in the United Kingdom made history by voting for their country to leave the European Union. Those supporting “Brexit” — or British exit — won a narrow but clear victory over those who wanted the UK to stay in the EU. The vote represents a repudiation of Prime Minister David Cameron, who fought for the UK to stay in the EU. It reflects a rejection of the political and business elites, who overwhelmingly opposed Brexit. And, perhaps most importantly, the vote embodied the starkest threat yet to the decades-long European project of political and economic integration.
Cameron has already said that he will resign by October. Global financial markets are reeling. Some are predicting a recession in the United Kingdom. European leaders are scrambling as they decide on how to respond to the vote. And nationalists in Scotland — who voted strongly to remain in the EU — may push for another referendum on independence.
The full effect of Brexit will not be known for years. The UK first must formally invoke its right to leave the EU. Then there will be a two-year period during which the United Kingdom and the EU will renegotiate their new relationship. How these talks will go is anyone’s guess. Much depends on how firm a line other EU members — fearful of further defections — will take with the United Kingdom.
What effect will the Brexit have on the United States? In the short term, we will be facing a period of financial turmoil and a likely flight to the dollar as investors seek safe assets. Should a recession strike the United Kingdom, a major trading partner, we will probably see lower U.S. exports; should a UK recession spread to other European countries, we may see further weakness in our economy. Ongoing talks on a U.S.-EU trade and investment agreement will become more complicated.
Brexit will have little effect on our traditional security alliance with the United Kingdom, either on a bilateral basis or through NATO. We will lose a largely pro-American voice in the formulation of EU foreign policy. This will be offset in part, however, by the United Kingdom’s new ability to align its policies more closely with the United States than an EU consensus would permit.
The big question for the United States is the impact of Brexit on the future of the EU. We have long supported European integration on sound security and economic grounds. A peaceful, prosperous Europe is a truly vital interest of the United States. Brexit will not usher in a new period of armed conflict; the days of outright war among Western European powers are long behind us. But the EU is today a very troubled institution. The monetary union — of which the United Kingdom is not a member — has proved to be a disaster. The EU’s handling of the aftermath of the 2007–2008 financial crisis has been, to put it mildly, less than stellar. Its top-down, bureaucratic approach to policymaking has made it seem both remote and undemocratic. And, like many of its member states, the EU still has still to find a way effectively to address rising nationalist sentiment, much of it focused on immigration.
The European project may not be dead. It will almost certainly survive. But it is wounded. With luck, Brexit will serve as a wake-up call in European capitals. The United States will have a modest voice as the EU debates its future. But we should, where possible, promote an institution that is both more effective and accountable.
Joe Barnes is the Bonner Means Baker Fellow at the Baker Institute. From 1979 to 1993, he was a career diplomat with the U.S. State Department, serving in Europe, Africa, the Middle East and South Asia.
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