Editor's note: On June 23, the United Kingdom will decide whether or not it will stay in the European Union. The outcome of the vote is still unclear, but the implications are not. The following analyses address virtually every eventuality of the vote, the results of which will be addressed in subsequent pieces. Follow the links to read the full analyses.
Brexit: Britain's Call Option
June 22, 2016: The prevailing wisdom says Britain would be worse off outside the common market, subject as it would be to the European Union's common import tariffs. Those concerns, however, are misplaced. Europe is not, strictly speaking, a "free trade zone." Zero internal tariffs alone do not a free trade area make. Europe imposes extensive import duties, which by definition is not free trade. Internal EU commerce, moreover, is subject to onerous regulations on standards, packaging, safety, labor, logistics and so on. The European Union also engages in wide-ranging industry protectionism, particularly for the agriculture sector, which raises prices, lowers efficiency and hampers structural competitiveness. Britain would have the option to dismantle much of this stifling protectionism in a Brexit scenario.
How a Brexit Would Undermine Europe's Balance of Power
June 21, 2016: If Britain quits the European Union, though, it risks disrupting the base of power the bloc has come to rest on. Germany relies on Britain's backing when it comes to promoting free trade in the face of France's protectionist tendencies. France sees Britain as not only a key defense partner but also a potential counterweight to German influence. Removing Britain from the equation would shatter this tenuous arrangement at a particularly dangerous time for the deeply fragmented Europe, when neither Germany nor France is satisfied with the status quo.
Brexit or Not, Mediterranean Political Uncertainty Will Roil the EU
June 21, 2016: One of the most notable consequences of the European crisis is the rise of anti-establishment parties across the Continent. What began as a financial crisis some eight years ago soon evolved into economic and unemployment crises. Low economic growth and high unemployment bred popular mistrust of mainstream political parties and gave rise to new political forces that question traditional leadership. Over the weekend, several events in Italy and Spain highlighted the extent to which anti-establishment sentiment is threatening the political order in some of the eurozone's largest economies ahead of key votes in each country.
Gaming out the British Referendum
June 20, 2016: Stratfor is not in the business of calling elections. We do, however, forecast how events will unfold once the outcome of the vote is decided. While a decision to leave the European Union would have sweeping political and economic consequences for both Britain and Europe, a vote to remain would not improve the prospects of Continental integration.
The Problems a Brexit Won't Solve
June 15, 2016: The European Union delivered a lot to its citizens, but it also threatened to destroy a lot, above all the national sovereignty, local democracy and control over immigration and economics that loom so large in the Brexit debate. On the whole, Europeans seem to have thought this trade-off worthwhile until things started clearly going wrong around 2008. Since then, a yawning gap has opened. On one side are Davos-type elites who remain committed to the European Union as the best way to turn Europe into a big fish able to compete with both the United States and China. On the other, a growing proportion of the electorate blames the Continental bloc for the very problems it has been trying to solve. From this perspective, self-appointed Europhile experts are not just failing to turn the clock back to the days when the West stood above the rest; they are actually traitors, rats who are leaving the ship they have themselves sunk and jumping as quickly as they can to join a deracinated, globalized elite, happier in Brussels or Singapore than in the depressed cities of their own homelands.
A Brexit Cancels out the Real Benefit of Devolution
June 8, 2016: A post-Brexit United Kingdom will not become a giant Switzerland or Singapore, both of which rank higher than the United Kingdom in competitiveness, connectedness and innovation. Furthermore, these countries are not in fact the blissful deregulated islands they are often portrayed as. Switzerland has deep treaty commitments and economic ties across Europe, even as it has stepped back from joining the European Union over the same migration row that fuels Brexit fervor. For its part, Singapore is the new undisputed champion of Association of Southeast Asian Nations (ASEAN) integration, leading a Southeast Asian bloc that aspires to be an Asian European Union. It drives and profits from investment in its own region rather than running from it.
