The European Union could be facing the greatest challenge in its history. Her Majesty’s government has made it official and scheduled a June 23 referendum on the so-called Brexit – Britain’s departure from the EU.

Just the possibility of Brexit could throw Europe into chaos because no nation has ever left the European Union. There simply is no precedent for a nation leaving the EU, particularly one with the world’s fifth largest economy.

Europe certainly needs the United Kingdom, perhaps now more than ever. Britain has a gross domestic product of £2 trillion (€2.53 trillion) and an economy that is one of the best performing in Europe, according to The Independent. One reason why the EU needs Britain is obvious: some of the organization’s members are in obvious decline.

The EU Needs the UK

Two of Europe’s largest economies, France and Italy, are likely to fall out of the G8 club of the world’s largest economies in the next two decades, The Centre for Economics and Business Research (or CEBR) projected. That indicates Europe’s economy could shrink drastically without Britain in the club.

This means the EU could need the UK as an engine of economic growth to sustain its operations. Some economists note that economic growth on the European continent is slowing dramatically.

“The United Kingdom is forecast to be the best performing economy in Western Europe and, after overtaking France in 2014, is likely to overtake Germany and Japan during the 2030s,” a report from CEBR stated.

If that is true, it might not be possible to sustain the European Union without Britain. The organization might survive, but it will be poorer and more dominated by Germany than ever before.

A successful Brexit would increase nationalist pressure to leave the EU in countries like France, Italy, and Spain. A major reason for this would be hysteria about becoming German colonies in the future.

Could it lead to a Power Vacuum?

An even greater problem for the EU would be a loss of military power. Britain is one of two EU members with nuclear weapons (France is the other) and a large fleet. Some observers, such as the editors at The Economist, even believe that the UK is Europe’s largest military power.

The Union would lose a lot of influence and credibility without Her Majesty’s Armed Forces at its side. One result of Brexit could be that the EU will be reduced to a regional power unable to flex its muscles beyond Europe.

Another is that more pressure would be put on Germany to expand its military and possibly become a nuclear or naval power. Unfortunately, it is not clear whether there is any popular or political support for such a military buildup in the Federal Republic.

There, of course, is the possibility of creating some sort of new military alliance between Britain and the EU, possibly with NATO as a framework. Such an alliance would be tempting to Europe, but not necessarily politically popular in Britain.

Another development could be to increase American influence because a Europe without Britain would be even more dependent on the United States militarily. That could create serious problems because there seems to be little support for increased military alliances in the United States itself.

A Reduced European Union

There is one certain effect of a successful Brexit: the European Union’s bureaucracy will be much smaller and poorer.

Each week, Britain contributes €442.3 million to the EU’s budget, The Economist estimated. That means a Brexit would force the EU to drastically cut back its operations. The loss of that money will undoubtedly trigger new battles within the EU, particularly with poorer countries like Greece that will not be willing to pay higher taxes to support the Union.

The most likely result of Brexit will be for the EU to greatly reduce its military and foreign policy ambitions. The Union would be reduced to the role of a continental economic regulator rather than a global power.

The EU will Survive

The European Union itself will survive because countries such as Greece, Italy, and Spain might not be able to survive without it. In particular, these nations need a stable currency, which the Euro provides to sustain their economies.

There is simply little or no incentive for smaller nations that lack a currency like the Pound and significant military power to leave the EU. The real test will come with Sweden, which shares some of Britain’s characteristics, including its own currency.

A poorer, smaller, and less ambitious European Union would survive after Brexit. The biggest question arising from Brexit will be how trade would be affected by Britain’s departure. Would the exit lead to new cooperation or some sort of trade war between Europe and Britain? Once outside the EU, Britain would be free to negotiate new free trade deals with countries such as the United States or even China. Such arrangements could increase tensions between Britain and Europe.

Such trade battles could be complicated by new calls for Scottish independence and efforts of other nations to leave the EU. The access to the British market provides a strong incentive for nations like Portugal and Estonia to stay in the EU. With Britain out, such countries might try to leave or set up alternative political structures.

Even though the European Union would survive Brexit, it would be a very different organization that would have to drastically rethink its future. The loss of the United Kingdom will change the EU beyond recognition.


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