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The EU’s Brexit dilemma
Over the course of the next two years, diplomats and leaders from the UK and the European Union will negotiate the terms of Brexit. On one side of the table, whoever will be representing the UK, will be those trying to secure British interests - such as access to the single market. On the other, EU negotiators will have a choice: either to play good cop or bad cop.
For many in the UK, voting Leave was about rejecting European bureaucracy and the political establishment - in Brussels and in Westminster - as much as it was about immigration and sovereignty. But what worries many EU leaders today is that this anti-establishment sentiment extends far beyond British shores.
Indeed, euroscepticism is on the rise across the continent: voters in several other countries share the concerns of millions of Britons when it comes to the EU’s project of “ever closer Union” - harmonising the policies of member states to make the EU tighter.
Even within some of the EU largest member states, rejection of the European project is increasingly prevalent: in France over 60% of voters have an unfavourable view of the EU and in the Netherlands a recent referendum - deemed a proxy approval rating for the European Union - revealed a deep fracture between the opinions of the elite and of the electorate as a whole.
Despite the political autism of EU leaders - frequently accused of being out of touch with the concerns of European voters - the latter are well aware of the rise of euroscepticism. Anti-EU parties are on the rise in almost all member states and have democratically infiltrated the European Parliament.
After 2014’s European elections, the Front National, UKIP and the Freedom Party of Austria have been among the populist movements sitting in Strasbourg’s Parliament. They prove to be an irritating and often disruptive presence - as obvious from the speeches of UKIP ex-leader Nigel Farage and FN leader Marine le Pen after the Brexit vote.
On the face of it, EU negotiators should play bad cop with their British counterparts. The EU leaders have already taken a hard line on Brexit, stating their willingness to kick the UK out of the EU as soon as possible and to refuse British negotiators any chance of “cherry-picking” the terms of a potential Brexit deal.
Hindering any chance of friendly negotiations between the EU and the UK would make an example out of Brexit, and would warn “curious eurosceptics” in other European states of the potential consequences of leaving the EU.
However, EU leaders might choose not to go down that road. Firstly, taking a strong stand against the propositions of UK negotiators would further tarnish the EU’s reputation - one that has already been dealt many blows by the same eurosceptic parties whose influence it is trying to suppress.
The European Union has already been lambasted for its supposedly overbearing and “authoritarian” role in the Greek crisis, where it has - as part of the Troika of creditors - twisted the Greek government’s arm to enforce harsh austerity measures. Adopting a similar approach to the Brexit negotiations could backfire for the EU leaders.
EU negotiators could also be deterred from playing bad cop with the UK by European “Big Business”. At the moment, the European Union exports more towards the UK than it receives in imports, and that trade surplus has increased year on year. Moreover, the UK is the EU’s largest export market, with 16% of the EU's goods and services finding their way to Britain - double what China receives from the EU.
The beneficiaries of such trade are therefore European businesses - German carmakers, French winemakers, etc - and the latter advocate against tariffs and other trade barriers that would harm business between the UK and their respective country.
Markus Kerber, CEO of the industry lobbying group BDI (the Federation for German Industry) warned that imposing trade barriers between the UK and Germany, or the EU for that matter, would be “very, very foolish”.
The anxieties of Mr Kerber and numerous other European businessmen are likely to affect the stance of EU negotiators when it comes to a deal with the UK, as the former will be looking to secure their interests through the powerful tool of lobbying.
Brussels is a city full of lobbyists. Indeed, close to 30,000 of them populate the Belgian capital and enjoy considerable influence over legislation and decisions on energy, technology, diplomacy and more. Under pressure from the corporate world, MEPs and other EU officials must often fall in line with, or at the very least consider, the demands of Europe’s Big Business.
When it comes to Brexit negotiations, EU negotiators will therefore have to balance the potential political and economic consequences of a deal with the UK. On one hand, the European Commission and many European leaders want to see a pitiless approach to talks with Britain, to scare off any continental eurosceptics from going down the same path. On the other, they will be asked to protect and guarantee today’s free trade between the UK and the EU. After turning British politics on its head, the damage that Brexit has done isn’t over yet.