Ten days have passed since the public referendum that decided on Great Britain’s exit from the European Union. It was an unexpected decision, that we defined as damaging but not tragic. In the past ten days, because of the division and indecision of European countries, everything was done to make the consequences worse than they should be.
Things started well. A hypothesized meeting between Renzi and Hollander in order to then prepare a reunion with the German chancellor was the wisest path toward an understanding between the 27 countries remaining in the union. The trio of Germany, France, and Italy (to which Spain should also be added) represent almost half of Europe’s population and much more than half the EU’s economy. Everything seemed to be well prepared, but while French and Italian politics became decidedly closer– also to keep track of problems in Southern Europe– the German Chancellor, strengthened by the US’ increasingly visible support, chose a different path, reaffirming her preference for a less federalist and more intergovernmental Europe, at least in the delicate subject of the economy. A decision altogether opposed to the declaration, signed in the same hours by the French and German foreign ministers that, with the evocative title “for a stronger Europe in an uncertain world”, foresees new forms of collaboration in the military sector, border surveillance, immigration, and especially in the harmonization of the economy. At the same time, the voices of the Italian and French economic ministers remained unheard, who pushed for more coordinated budget and treasury policies.
Adding to the cacophony, during the same hours, representatives from ten countries met, putting a plan on the table to arrive at an agreement on further weakening the European Commission’s power, making the repetition of Britiain’s referendum possible, given that new votes would refer to a fundamentally different European Union. We were therefore surprised that, in the end, the European Council decided on nothing, not on the timeline to actuate Brexit or on the consequences of the departure.
To complete the opera, the council’s debate concentrated especially on the necessity of confirming a complete absence (without additional forms of solidarity) of public support for the banking system. All of this while international speculation hit hard on credit institutions from all European countries, wounding banks in financially weaker countries much more significantly, among these Italy and Spain.
Germany’s position against any common scheme to insure deposits and irritation over the European Central Bank’s excessive reduction of interest rates have had a more relevant importance compared to the more urgent and weighty Brexit problem.
One chink in this cacophony came from the concession to Italian banks to be able to obtain liquidity support from the treasury in case of extreme situations. It’s a hypothesis that’s unlikely to be implemented given the existing abundant availability of liquidity, but it signals a continuous dialogue to keep in reserve in case of emergency, even if Germany’s position regarding state assistance and bank recapitalization remains immutable.
Ten days after Brexit, the most faithful summary of the situation is contained in Charles Grant’s brief words, who wrote simply that “until now the narrative was disintegration, not integration.”
It’s clear that, in this landscape, postponing the examination of Brexit’s consequences was a grave error, also because we’ll be on the threshold of presidential elections in three key EU countries this fall. In fact, Holland will vote in March 2017, France in May, and Germany in September.
Therefore, the future relationship between the European Union and Great Britain will be heavily influenced by the problems and internal interests of three EU protagonists, all of whom belong to the small number of founding fathers, characterized by a progressive weakening of traditional powers in the face of the eruption of new political forces.
Therefore, we need to decide which direction to impose on the negotiations regarding Brexit as soon as possible. We have before us the experience of relations with Norway that protects the single market, introducing some exceptions in sensitive sectors, such as agriculture, fiscal, and social policies. This is not an impossible undertaking because Great Britain enjoyed many exceptions already. We must begin this task quickly despite Germany’s contrary opinion, because late messages have already caused enough damage.
Maybe the English were coherent with their history and their deepest sentiments, but it appears increasingly clear that they committed political suicide. It is therefore opportune to close these reflections with one of Churchill’s famous quotes (whose mention in various media lately was not a coincidence) that reminds us that the true problem of political suicide is that it leaves us alive to witness the consequences. Let’s wait for the next episodes, then.
Already published on Il Messaggero 04/07/2016