Brexit – A Divorce From A Partner In Mid Life Crisis?

by Dr. Ruwantissa Abeyratne

Hope is the thing with feathers, that perches in the soul, and sings the tune without the words, and never stops at all… Emily Dickinson

( March 30, 2017, Montreal, Sri Lanka Guardian) On 25 March 2017 the European Union celebrated its 60th anniversary.  In 1957, 6 States of Europe signed the Treaty of Rome which established the European Economic Community, which in 2009 became the Treaty on the Functioning of the European Union. The 1958 treaty was signed with peace among European nations as its cornerstone and as a sanguine response to the devastation which  wrought havoc, mass murder and bestiality that displayed the worst of humanity during World War 2.  60 years on, the European Union (EU) has 28 members which includes the United Kingdom (UK) and has matured as a political and economic union of European States, winning the Nobel Peace Prize in 2012 for the Union’s achievements and contributions to peace and harmony in Europe over the years.  The downside is that the EU has evolved into a bureaucratic behemoth with cumbersome policies that often stultify external relations of countries as well as developmental endeavours on environmental, public health and immigration matters.

Following a referendum held on 23 June 2016 where the citizens of the UK decided to leave the EU on a simple majority of 51.9% to 48.1%, Prime Minister Theresa May formally handed over the letter of notice of Brexit to the President of the European Council Donald Tusk on 29 March 2017 at 12.20 p.m. British time. This letter triggers a transition period of 2 years from 29 March when the EU and the UK will negotiate terms that would enable the UK to formally exit the EU, after 46 years of membership.  It is said that a multiplicity of causes is attributed to the decision to leave, among which are: disenchantment with the leadership; immigration blues and islamophobia; EU rules which stultified the small businesses of the UK; and subjugation of the British judicial system by the supremacy of the European Court of Justice.  In her letter to Donald Tusk Prime Minister May emphasised that leaving the EU does not mean leaving Europe.  She said inter alia: “We want to make sure that Europe remains strong and prosperous and is capable of projecting its values, leading in the world, and defending itself from security threats. We want the United Kingdom, through a new deep and special partnership with a strong European Union, to play its full part in achieving this goals…”.  Having said that, the position taken by the Prime Minister is that Brexit would mean that the UK would no longer be in the European Single Market nor in the Customs Union.

In this context the first consideration is the response of the President of the European Council to  Prime Minister May’s letter.  Mr. Tusk expressed regret at Brexit, citing that 29 March was not a happy day either for London or Brussels (where the EU is headquartered) and went on to say that this would make the 27 States of the EU even more determined and more united, particularly in the context of the Rome Declaration signed on the occasion of the 60th anniversary of the EU.  The signatories to this Declaration said: “The European Union is facing unprecedented challenges, both global and domestic: regional conflicts, terrorism, growing migratory pressures, protectionism and social and economic inequalities. Together, we are determined to address the challenges of a rapidly changing world and to offer to our citizens both security and new opportunities. We will make the European Union stronger and more resilient, through even greater unity and solidarity amongst us and the respect of common rules”.

Implicit in the Declaration is an acknowledgment of the EU’s weaknesses that seemingly cry out for rectification.  For example, the Declaration somewhat grandiloquently claims inter alia  that Europe is going to be: a) a safe and secure Union where all citizens feel safe and can move freely; b) a prosperous and sustainable Europe: a Union which creates growth and jobs; a Union where a strong, connected and developing Single Market, embracing technological transformation, and a stable and further strengthened single currency open avenues for growth, cohesion, competitiveness, innovation and exchange, especially for small and medium-sized enterprise; c) a social Europe: a Union which, based on sustainable growth, promotes economic and social progress as well as cohesion and convergence, while upholding the integrity of the internal market; a Union taking into account the diversity of national systems and the key role of social partners; a Union which promotes equality between women and men as well as rights and equal opportunities for all; a Union which fights unemployment, discrimination, social exclusion and poverty; d) a stronger Europe on the global scene: a Union further developing existing partnerships, building new ones and promoting stability and prosperity in its immediate neighborhood to the east and south, but also in the Middle East and across Africa and globally.

Although these points bring to bear the perceived inadequacies of the EU, it is worthwhile, particularly in the wake of Brexit to feel the pulse of the Union.  Giles Merritt in his au fait book Slippery Slope confirms some of Europe’s weaknesses that point to a compelling need for the 27 States of EU to stand up and take notice.  One is that although European nations are prolific in coming out with scientific innovations and breakthroughs which are identified in scientific journals, they are slow to implement them, which seriously stultifies European growth.  With regard to the European ambition of a safe and secure Europe, Merritt points out that although Europe has a combined armed force of 2 million (the largest in the world) it has hardly flexed its muscles without the support of the United States.  This stands as a serious lapse and weakness within the NATO umbrella. Another weakness lies in the field of foreign policy where Europe is not heard in the global arena, and, although Europe can be a powerful negotiator in trade issues, disparate stands and positions taken by European States stand as a barrier to efficiency and sustainability.

With regard to the Euro, although the single European currency stimulates trade activities and free movement of capital, goods within the Union, according to Gabriel Mursa, in his paper Euro – Advantages and Disadvantages it is a “fiat” currency which is based on the trust of the people.  Mursa goes on to say:   “ The major disadvantage of the euro is that the European Central Bank may use discretionary monetary issues, which would allow the application of policies similar to those used by national governments with their own currencies. Being deprived of a real base or standard, the European authorities can devaluate the euro and can finance the budget deficits of the Eurozone countries. This is not just a theoretical possibility, but a fact that has happened in recent years, when the European Central Bank resorted to monetary emissions, accepting as collateral the junk bonds of Greek government. Basically, it behaved like a national government which, faced with the impossibility to finance the excessive public expenditures, used the method of deficit monetization. By doing this, the European Central Bank itself violated fundamental principles of euro convergence criteria. Thus, the euro cannot be a strong guarantee of the application of efficient long-term economic policies”.

The only discussion remaining is whether Brexit is good for the UK.  Prime minister May says the UK would be a stronger global force. The economic fallout is yet to be seen but some things are certain: The UK will be able to control its borders and immigration; it will not be subject to the pervasive decisions of the European Court of Justice; the UK will adopt its own laws and regulations; and small businesses in the UK will not have to pander to the pesky requirements coming from Brussels which effectively preclude them for developing their businesses. One of the main corollaries to this historic measure is expansion of the British infrastructure to prepare for what the British hope would be a greater Britain.   For example, expanding Heathrow – the nation’s hub airport – is considered to be the most critical infrastructure project to secure the long-term prosperity of Britain’s economy.  A report of March 2017 said: “In new polling by ComRes released today, Parliamentary support for expanding Heathrow reached a record high, with 77% of MPs now backing the project which will make Britain the best-connected country in the world, create up to 180,000 new skilled jobs and boost growth by up to £211 billion across the country.

The polling reveals a rare show of Parliamentary unity behind the Government’s decision to back an expanded Heathrow.  Heathrow expansion is seen by Parliament as the most beneficial infrastructure project for all regions across the UK – ahead projects specifically located outside of London like HS2, HS3 and Hinkley Point C – and enjoys the cross-party support of 83% of Conservative and 74% of Labour MPs”.

We shall wait and see.

The author is a Senior Associate at Aviation Strategies International and visiting Professor of Aviation Law and Policy at McGill University.  He is former Senior Legal Officer at the International Civil Aviation Organization. 


Author: Sri Lanka Guardian

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