WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

On Monday 27 June, a high-level panel discussion on the outcome of the Brexit referendum took place at the Vienna Institute for International Economic Studies (wiiw) with distinguished speakers, illuminating the topic from different angles.

Roundtable participants were Ambassador Philip McDonagh (Representative at the Permanent Mission of Ireland to the OSCE), Eva Nowotny (former Austrian Ambassador in the United Kingdom, France and the USA and currently President of the Austrian Commission for UNESCO and the Governing Council of the University of Vienna), Anton Pelinka (Professor of Political Science and Nationalism Studies at the Central European University (CEU), Budapest), and Fabian Seshadri (Second Secretary at the British Embassy, Economic and EU agenda). Two rounds of discussion were moderated by Michael Landesmann (former wiiw Scientific Director).

The first round addressed the questions, how it came to Brexit and whether we can speak of British exceptionalism?

A Bloomberg video 'The Brexit Debate Explained in 2 Minutes' highlights that the arguments of the Bremain movement concern economic risks of an exit from the EU, particularly due to uncertainty for financial markets, investments and trade. The main argument of the Brexit supporters was the loss of sovereignty. In particular, the exit of the UK from the EU is seen as the only sure way to regain control on migration policy.

Yet, speakers at last Monday’s roundtable put forward additional points. Taking a historical perspective, the UK has always been much involved with continental Europe, but only to a certain extent. The main reason for Britain to join the EU was the single market. A closer integration goes for Brexit voters beyond an acceptable level of losing national sovereignty. This attitude might indeed be exceptionally strong in the UK, given the nostalgia regarding Britain’s role in the world with its imperial history. They never lost a war. By contrast, France and Germany were defeated. Also, the negative attitude towards German (economic and political) domination in the EU was put forward by the audience.

However, to argue for an island mentality or UK exceptionalism is incomplete. Many developments in the UK are European phenomena. In practically all EU member states, EU scepticism is particularly strong among the older and less educated population. Also, populists tend to attribute to the EU negative national developments that are not linked to EU policies, e.g. regarding Britain’s national health care system in the run-up to the Brexit referendum. All panellists agreed that the often-invoked image of lack of democracy in the EU does not correspond to a more careful political analysis given the hybrid state of the EU short of a federal state.

Yet, what is a British phenomenon, is the political implication of the geographical distribution of the Brexit votes. The EU referendum opened two Pandora boxes: the danger of destroying unity within the EU and the danger for unity within the UK, as is evident from the Scottish and Northern Irish reaction. Further, 96% of voters in Gibraltar voted for Bremain. It is not British nationalism but rather English nationalism that is driving the UK out of the EU. Has democracy therefore won? How do we define demos? Can a simple majority rule be appropriate for such an existential referendum? And how can the UK compensate losers of the UK’s exit from the EU? The answers to these questions and hence the legitimacy of the referendum in the way it was conducted are not self-evident.

The second round of the discussion addressed the question, how we can deal with the fall-out of Brexit?

1. Short Run: Time for Calm

Some of the first reactions after the Brexit vote were perceived by panellists as exaggerated. For example, the Irish Minister for Foreign Affairs and Trade, Charlie Flanagan, reports a massive surge of applications for Irish passports. Panellists argued for calm and to not act precipitately.

David Cameron, UK’s prime minister, announced that he would step down by October 2016 and would leave it to the new Prime Minister to put forward article 50. Once article 50 is applied, a two-year process is going to start which is going to be energy and time consuming, diverting attention and resources needed in the EU to tackle other crises and pursue a reform agenda.

The rest of the EU pushes for a fast speed of Brexit in order to reduce the period of uncertainty. The current EU summit (28-29/06/2016) is already took place without representatives of the UK.

2. Medium Run: Tackling the Migration Crisis & empowerment of the EU

The Brexit vote was an emotional vote against the EU. What is needed is to tackle problems that are not solvable at the national but only at the EU level. Foremost is the refugee crisis that needs to be addressed with European solutions. So far, the Mediterranean countries were left alone. To keep one of the most substantial successes of the EU alive – the elimination of internal borders – we need to take care EU’s outer borders. There is no need to change the treaty for that. The implementation is needed of what is already there.

European reform is based on the necessity of deepening European integration. EU institutions need to have the power to deal with big crises, which could in the long run destroy the achievements of the single market and of the Schengen area.

3. Long Run: Integration, Democracy and Education

Jean Monnet’s basic philosophy of the process of European integration was the combination of ideas and interest. Education is relevant because it targets both these two elements.

The more we invest into education, the better the prospects for the EU. People know too little about European history after 1945, which can be seen as the most successful and peaceful time of Europe. People need to be educated about how the EU works to understand that it is a carefully designed structure combining elements of national sovereignty and attempting to build up democratic processes at the European level as well. One can argue that structurally the democratic deficit in the EU is of the same quality as the one in single nation states with multi-level federal structures: there is always room for improvement but it is not a structural problem.

Statements of panellists were summarised but not assigned to speakers according to Chatham House rule.