Summary
The British people voted on June 23 to leave the European Union, and now we ask: what comes next for the bloc? The vote is not the cause of Europe’s challenges, but rather a symptom of Europe’s growing fragmentation.
The European Union is at its core a project to contain nationalism by attempting to boost economic interdependency and prosperity. Nevertheless, the EU’s structural weaknesses, the financial crisis, divergences across the bloc, migration challenges, and socioeconomic and generational gaps within member states have led to the rise of anti-establishment and anti-EU forces across Europe.
We forecast that, over the coming years, the bloc’s ability to function will deteriorate. A new model of European geopolitics will emerge. The nation-state will return as the fundamental organizational principle of Europe, and with it ad hoc alliances and treaties designed to allow nations to pursue their interests on the basis of temporary arrangements of convenience. Germany, which depends heavily on exports, will weaken significantly. In the east, the Russians will move to stabilize their geopolitical situation and attempt to recover Ukraine as a buffer against what they see as Western aggression.
Meanwhile, Islam will play a bigger role in European politics. In the economic realm, new trade blocks and regional alliances will emerge across Europe. At the same time, an intensification in Italy’s economic problems will have ripple effects across Europe’s major economies, potentially negatively impacting the euro, European banks and exporters. Moreover, Europe’s multiple crises and the threat from Russia will drive Central and Eastern European states to seek new partners and allies.
The U.S. will respond to Brexit and the fragmentation of Europe by continuing to strengthen bilateral and regional relationships in order to achieve its strategic objectives on the European Continent.
Introduction
The United Kingdom’s vote to leave the European Union has caused an upheaval in Europe and concern around the world. For most, it was completely unexpected. From our point of view, the European Union has been fragmenting for several years. It couldn’t be forecast how the British vote would go, nor that the U.K. would be the place where the EU’s fragmentation would be made obvious to the world. We were confident that the fracturing European Union would at some point experience an event that would finally make it clear that the EU is facing the abyss.
The crisis came, and the British vote announced it with authority, but it had been unfolding for a long time. The core problem is that the founders of the EU could not decide on clear rules for the authority of the EU versus the authority of the nation-states. As with the founding of the United States, there was a central authority and constituent states, each claiming authority. There was no consensus in either founding about the relations of the whole to the parts. In the United States, this led to the Civil War. There will be no civil war in Europe. The American Civil War was fought over conflicting moral principles that men would die for. There is no such passion for the EU. Europe will escape the tragedy of the American Civil War, but will also not settle the questions of sovereignty and authority that are tearing it apart.
There were two breaking points: recession and immigration. Europe’s inability to recover from the 2008 crisis was, in the end, due to the fact that no nation wanted to be responsible for the well-being of another. This was rooted in the weakness of the moral bonds between member states. There was no sense of shared fate or obligation. So the Greek crisis was Greece’s fault and its problem. It was not Germany’s. A union so constituted cannot long endure.
The American regime faced the abyss over the question of slavery. Europe faces it over the question of migration. Who determines if there will be new inhabitants of Europe and where they will go? Will it be the EU or will it be the member states? And who will take responsibility for the consequences – not just financial, but cultural – of migration?
Here, the problem becomes not only between the EU and constituent nations. It becomes a crisis between those who favor immigration but are well positioned and wealthy enough to distance themselves from the economic and cultural frictions that result, and those who cannot distance themselves and are on the front line. The elite saw immigration as a moral issue. The lower classes saw it as a moral issue for which they would have to bear the cost.
Economic and social crises are part of our lives. But the EU, which cannot be a nation, could not survive these crises, because those who wrote the Maastricht Treaty compromised on the core question, as did the American founders. Sovereignty is the essential issue. Which institution is sovereign and how is it answerable to the people? Would there be European self-determination through a democratic process or would there be national self-determination? The EU answered “both,” and that doesn’t work.
Everyone is focused on the vote in the U.K. They didn’t see that the tension between the EU and Greece, Hungary, Poland and Italy, among others, was the precursor to Brexit. The Brexit vote is not only the most recent of such divergences, but the forerunner of many more. In the end, Europe is a continent of nations, and those nations attempted a vast and historic compromise between two sovereignties. As with the United States, a compromise was not possible. Unlike the United States, the moral foundation of the EU is wealth and safety at minimal cost. It was clear 10 years ago that it could not work. Now, it isn’t working. It is time to imagine the future.
Forecast for Europe to 2020
Ever since the Maastricht Treaty went into effect, the world began to speak of Europe as if it were a single entity governed by the European Union. This was never really true. Nevertheless, the world began to take it for granted, though European countries differed in their approach to the bloc.
This was always a tenuous position, more psychological than institutional. We have long regarded the ambiguity in governance to be the Achilles’ heel of Europe’s political arrangements. This was partly because it was difficult to understand and agree on the boundaries of the EU’s authority and that of the nations. But even more, the Achilles’ heel was that the Europeans were incapable of clarifying the EU’s role. They couldn’t clarify it, because they didn’t agree on what it should be. Nor could they.
The EU was a series of compromises between irreconcilable views. And inevitably, at some point, one of the members would throw up their hands and leave, revealing the basic truth of the EU: it is neither a federation nor a confederation. It is simply a treaty organization that can only survive as long as its internal contradictions don’t become unbearable.
Our forecast on the EU said that it would last until about 2020. We hold with that, in the sense that the EU continues to function. But we see over the next few years that the bloc’s ability to function will deteriorate, followed by the onset of a new European reality that is actually an old one. The nation-state will return as the fundamental organizational principle of Europe, and with it ad hoc alliances and treaties will emerge, designed to allow nations to pursue their interests on the basis of temporary arrangements of convenience.
It is important to understand what a failed institution is. It does not mean the EU will cease to exist. It simply means that it will be irrelevant to developments in Europe. The League of Nations became irrelevant in the 1930s although it continued to exist. The Holy Roman Empire was irrelevant by the 18th century, but it continued to exist. So too, the European Union will exist in some form, but will no longer be a decisive force. The EU began to decline when it failed to deal with the 2008 crisis and when nations began ignoring EU regulations during the refugee crisis.
We forecast two directions for the EU’s trajectory leading up to 2020. There will be increased indifference to its decisions. In addition, other trade and investment relationships will emerge. These will develop within regions – in northwestern Europe, in Central and Eastern Europe, in Mediterranean Europe and among the Nordic states and Britain. These will not be exclusive groupings nor will they be confined to economics. They will be dynamic in terms of scope and commitment. However, these new entities will be the locus of international coordination.
The EU will still exist and may even have a council and commission, with presidents and staff. But it will not have an independent reality. Following 2020, events will unfold as described in “The Next 100 Years.” European fragmentation will increase, and the declines of Germany and Russia will thrust new powers, like Poland, into positions of authority.
It should not be assumed that the fragmentation of Europe will change economic patterns. The EU did not create the trade and investment patterns that dominate Europe. Had there been no EU, trade between countries would have developed much as it did. Patterns of investment, within Europe and outside of Europe, developed not out of some institutional framework, but around the economic needs and reality of tens of thousands of businesses and millions of people. London was the center of finance for centuries before there was an EU. And since Europeans will still want financing, and since the infrastructure and relationships that London maintains are still its value, the pattern will remain largely the same and will change not when there are policy shifts, but when the structure of the international financial system demands it. Just as United Nations resolutions have become irrelevant to national decision-making, so will the EU.
The features of the European economy that will change will do so as a result of structural instability. The greatest unstable power in Europe is Germany, and it faces disaster when the next U.S. recession occurs, which will be sometime in the next two years. The Germans maintain their internal social stability by relying on exports for 45 percent of their GDP. Nearly half of their economic value thus derives from exports. In fact, the country has increased its dependence on exports since 2008. Germany relies so heavily on exports because its production exceeds domestic consumption. It is therefore in danger if trouble strikes, as German customers will not be able to replace export demand. Every 5 percent decline in exports reduces Germany’s GDP by roughly 2.25 percent.
Right now, the U.S. is a critical customer and the rest of the world is at best maintaining a stable level of imports. In the next recession, not only will the U.S. reduce consumption, but so will all other countries selling to the U.S. German exports will drop, so will its GDP, and the result will be a dramatic rise in unemployment. At this point, Germany’s ability to manage the European system will further evaporate. Large but dysfunctional economies are weaker in some ways than smaller ones.
The Russians, facing a different economic crisis revolving around low oil prices, will move to stabilize their geopolitical situation, in particular by attempting to recover Ukraine as a buffer against what they see as Western aggression. As in the 1980s, it will be a race involving strategic goals and economic decline. The fragmentation of Europe will be an opportunity for the Russians to develop relationships with nations no longer bound by the EU (but still by NATO, which is also losing relevance). They will succeed in most cases. However, we continue to expect that Russia will weaken around and after 2020 to the point that Moscow’s ability to control its own system will be dubious.
The U.S. will remain the dominant global power, with a reasonably functioning economy. Fearing the possibility of alignment between Russia and Germany, it will increase its activity in the Baltics, Poland and Romania. It will also develop even closer economic relations with the U.K. and with selected other countries, particularly military allies. These relations will be outside of NATO, since NATO will fragment along with Europe.
The Emergence of a Troubled European Bloc
The European Union emerged out of a project to contain nationalism and limit prospects for another major war on the Continent by aiming to boost economic interdependency and prosperity. Nevertheless, structural weaknesses, economic troubles, imbalances in the bloc and divergences in the interests and outlooks of voters within European states have undermined the EU’s legitimacy and contributed to a rise in nationalism across the Continent.
Today’s European Union has its roots in post-war French fears about Germany, post-war Germany’s aspirations and U.S. strategy for managing a balance of power on in Europe. The precursor to the EU, the European Coal and Steel Community (ECSC), was founded in 1952. It laid the foundations for close trade and economic ties among Western Europe’s leading economies and was designed to prevent any future hostilities between historical rivals France and Germany. France’s steel industry depended on coke and coal imports from Germany, and the creation of the ECSC meant the two countries’ economies were undeniably intertwined. As French Foreign Minister Robert Schuman wrote when proposing the ECSC, pooling coal and steel production would make war between France and Germany “not merely unthinkable, but materially impossible.”
After World War II, France initially wanted to ensure that West Germany would not become a dominant power in the region. Binding the German and French economies and creating political structures where Paris could to some degree influence German policy-making thus became important. West Germany, meanwhile, wanted to grow economically and become an accepted international player, and thus saw the European project as a vehicle for achieving its aspirations. The U.S. encouraged European integration because Washington regarded greater economic interconnectivity and decision-making through European structures as tools that could help maintain a balance of power on the Continent.
The ECSC evolved into the European Economic Community and, later, the European Union. Each successive institution had more areas of responsibility than the previous. Proponents of European integration saw the free movement of labor and capital, common democratic and rule of law principles, unhindered competition, uniform regulations and a common currency as the core building blocks of a prosperous and peaceful European Continent. Achieving these aims would require national governments giving up a range of prerogatives and empowering a central body – the EU.
Underlying Structural Problems
Support for European integration currently, however, varies significantly, both across the bloc and within member states. The EU’s structural weaknesses, the financial crisis, imbalances within the bloc and socioeconomic and generational gaps within member states have contributed to the rise of anti-establishment and anti-EU forces across Europe.
The bloc’s basic structural problems have undermined the legitimacy of European institutions in the eyes of many European citizens. The EU has a large bureaucracy, including the European Commission, the European Council (made up of member states’ leaders) and the European Parliament. However, the EU has little democratic legitimacy. Only the European Parliament is directly elected by citizens, and much of the critical decision-making happens through negotiations among member states’ governments and inside the bloc’s various technocratic bodies.
In addition, the difficulty of navigating the interests of all member states often leads to gridlock. The bloc has grown from six Western European founding members to 28 members across the Continent. Moreover, EU institutions have weak enforcement powers. The bloc has the power to impose sanctions, withhold funds or take away a member state’s voting rights. However, the bloc often shies away from imposing consequences on member states that violate rules, and no country has ever lost its voting rights.
The 2008 financial crisis exacerbated the existing concerns regarding the bloc’s legitimacy, gridlock and inability to enforce decisions. The crisis did not impact all parts of the bloc evenly, with weak eurozone economies like Cyprus, Greece, Spain and Ireland bearing the brunt of the initial crisis and the years of painful austerity measures and high unemployment rates that followed. Germany, Europe’s largest economy, had a disproportionately large role in shaping the bloc’s response to the economic crisis.
At the same time, many Europeans, particularly in southern economies, came to resent European institutions and large European economies. The latest opinion poll by Eurobarometer, conducted in November 2015, reveals the enduring impact of the financial crisis on the relationship between southern economies and the bloc. People in Cyprus and Greece, which underwent painful bailouts and today still have among the highest unemployment rates in the EU, feel the least attached to the EU.
Indeed, there are signals that public opinion across Europe is turning against the bloc. For example, a poll conducted by Ipsos in March and April found that 55 percent of French voters would support holding a referendum on EU membership, while 41 percent would vote to leave the bloc. As Europe’s problems intensify and EU institutions become increasingly irrelevant, more Europeans will call for leaving the bloc or empowering national governments.
Migration and Social Polarization
These underlying issues were in place before Britain’s referendum campaign began; it was the migration issue that tipped public opinion in favor of Brexit. Beginning in 2011, the impact of the economic crisis and increased immigration led to discussions of a referendum. With the refugee crisis hitting Europe in 2015, the vote ultimately came down to people’s perceptions of the impact of immigration.
Two issues need to be considered in order to understand further evolutions in Continental Europe: the rise in nationalism and social polarization. Both refer to the divide between the elite and the masses – which has dramatically intensified as the EU confronted the economic crisis.
The financial and refugee crises have revealed the divergence between the European elites and the masses. The Brussels elite are composed of highly educated bureaucrats who have addressed urgent matters by implementing slow and gradual changes, such as the European Border and Coast Guard that was meant to help states deal with the refugee crisis. Their distant management approach to Europe has been influenced by the member states’ representatives and other politicians who are part of the elite.
Before the financial crisis, politically correct national politicians were supportive of anything coming out of the Brussels’ bureaucratic machinery. In the post-Cold War period, politicians could win elections with a pro-European, pro-integration approach. But once the economic crisis hit and social problems appeared, traditional politics and politicians’ approach towards Brussels changed.
High unemployment rates in southern Europe led people to immigrate to other EU countries. This was happening while emigration continued from the Eastern European countries that joined the EU about a decade ago. The prospect of higher income and better working conditions in Western Europe is appealing for Eastern Europeans. The refugee crisis only intensified socio-economic and security concerns.
In the U.K., a major argument for the “leave” campaign was that Brexit would allow more control over immigration from the rest of the EU. Britain’s population has grown from 57 million in 1990 to 65 million in 2015, despite a low native birth rate – mostly due to migration. While the migration flow is now almost equally divided between non-EU and EU countries, the number of EU-born people living in the U.K. has more than doubled since 2004, reaching about 3 million in 2015. The share of EU nationals grew from 1.8 percent to 6.3 percent of adults aged 16 to 64. The vast majority are economic migrants. While the majority of European immigrants initially came from the new EU member states in Central and Eastern Europe – including Poland and Romania – migrants from southern European countries also started to arrive after 2008.
The main concern for those supporting Brexit was that immigration reduces the salary expectations and job opportunities for Brits. At the same time, the migrants were perceived as benefiting disproportionately from the U.K. welfare system, with hospitals and schools becoming crowded. Moreover, the “leave” campaigners have underlined that migration has also had a negative effect on housing. Properties in London and other major cities are owned by rich migrants who outbid British buyers, while poor migrants are willing to crowd into dwellings that British residents find too congested.
The agreement between the EU and the U.K. negotiated in February by the British Prime Minister David Cameron would have allowed Britain to impose a four-year emergency brake on in-work benefits for European migrants residing in Britain – a policy that would be in place for seven years. However, this failed to alleviate the fears of the electorate. The way the EU, and in particular Germany, has managed the refugee crisis since mid-2015 has increased the worries of the U.K. population and strengthened the “leave” campaign. The elites and the masses saw this crisis very differently and distrust between the two mounted.
Furthermore, stark generational and socioeconomic gaps in perception of the EU have emerged. Eurobarometer polling data reveals that, across Europe, 55 percent of young people between the ages of 15 and 24 say they feel attached to the EU, compared to only 45 percent of Europeans over the age of 55. Levels of attachment also vary between socioeconomic groups, with the upper-middle class expressing greater attachment to the EU than the middle and lower-middle classes.
The masses experiencing the negative effects of the financial crisis throughout Europe have made it possible for new political movements to gain support at the expense of the traditional elitist (but mainstream) parties, which many feel no longer protect their interests. The new anti-system parties have promised better governance and more respect from Brussels for their national interests.
In some countries, established parties — like Poland’s Law and Justice Party and Hungary’s Fidesz – have promoted Euroskeptic views. In others, right-wing anti-establishment forces like the National Front in France and the Alternative for Germany party have challenged EU integration, garnering a growing amount of support. In parts of southern Europe, opposition to the bloc’s policies has come from the left, and parties like Greece’s Syriza and Spain’s Podemos. However, in the U.K., while the top leadership of the establishment parties were supportive of remaining in the EU, a third faction drawn from both parties supported leaving.
Economic problems in Europe have intensified social polarization, which has supported the rise of nationalism. The “us vs. them” divide has widened. Both sides of the debate on EU membership are growing increasingly stringent and extreme in their views, leaving little middle ground. “Remain” supporters have become hostile toward “leave” supporters. In essence, European society has again become tolerant of intolerance.
Imagining the New Europe
In the coming years, the EU will take on a new shape. But certain regions and areas of integration will be more affected than others. Here, we look in depth at the future of the free trade zone, Germany, Russia and southern and Central Europe, as well as the impact Muslim migration will have on the Continent.
The Free Trade Zone
Before 2008, it was believed that Brussels could establish a single market – a space where the free movement of goods, services, capital and people is guaranteed. However, there hasn’t been a free flow of capital within the EU – during the economic crisis negotiations, when countries negotiated based on their national interests, the structural problems of the eurozone were evident.
Germany has seen its national interest threatened as the EU weakens. Considering its dependency on exports and the free trade zone, Germany had to get involved in negotiating a solution to the banking crisis and the economic fallout in the south. It exerted a leadership position that it didn’t want, but had to take. At the same time, the sovereignty of countries like Greece and Cyprus has been under threat, as they submitted to the EU’s control. But, ultimately, the goal was to keep the free trade zone intact.
Trade is driven by economic need, not by regulations. Businesses see opportunities for trade and drive nation-states to facilitate their endeavors. Trade between the U.K. and EU members will continue after Brexit. However, while most countries’ exports to the EU increased after becoming members, the U.K. and Ireland have seen a drop, particularly since 2008. Unlike Germany, the U.K. is also almost equally dependent on the EU and non-EU markets.
Most member states have two or three European partners to which they export more than 50 percent of their total exports. The proportion of trade between geographically closer partners has increased. This highlights another post-Brexit trend we can expect to see. As Germany’s influence in the EU weakens, countries within the same region that share similar views on economics and/or security will likely increase trade and investment among themselves. Countries in northern Europe, Mediterranean Europe, Eastern Europe and Western Europe may group together to enhance their trade relations.
Furthermore, following the EU’s fragmentation, special agreements on trade and investment may appear between EU countries and non-EU countries. Similarly, countries that choose to leave the union will be able to take their own path and engage in bilateral and multilateral arrangements based on their own national interest. Countries like France and Germany will probably enhance relations with Russia. Central European countries like Romania and Poland may choose to increase bilateral economic relations with the U.S. Countries may choose to have better economic ties with neighboring non-EU countries. All in all, Europe will see a rise in the politics of international trade.
The EU was built on the idea that free trade would support prosperity. In seeking to establish a single market while also expanding it, the EU tried to take over regulatory functions that would normally belong to nation-states. One of the Brexit “leave” campaigners’ main arguments was the fact that Brussels’ excessive red tape was negatively affecting small businesses. Non-tariff barriers made it hard for small British companies to sell their products and services within the EU. The barriers include technical regulations, standards and conformity assessment procedures, labeling rules and sanitary measures. These barriers contribute to dilution of the free trade area and are likely to increase after Brexit. Just as national labor codes make it hard for both investors and workers to consider the EU a uniform labor market, such barriers are proof that trade within the EU is not actually “free.”
Another, less visible, claim from the “leave” campaign was that, due to the limits imposed on the deficit (members are obligated to keep deficits below 3 percent of GDP) and the public debt (below 60 percent of GDP without diminishing at an adequate rate), the U.K. couldn’t make its tax system competitive. This links to the long-standing argument that the U.K. gets less than it gives to the EU, as a net contributor to the EU budget.
Complaints about the negative effects of EU regulations on national economies have increased since the financial crisis. Until 2008, the EU saw nationality as a cultural rather than political phenomenon and, therefore, took over certain issues from national governments. That model worked until it was clear the bureaucrats in Brussels could not provide solutions to the economic crisis. In negotiations over how to address the crisis, member states prioritized their countries’ national interests.
Germany
As Britain leaves the bloc and European economies struggle, Europe’s economic powerhouse – Germany – will face its own crisis. This relates to the central strategic question that has plagued Europe for well over a century: what is the role and extent of German power in Europe? The Franco-Prussian War, World War I and World War II were all about the extent of German power, as Germany sought to dominate the Continent and the various coalitions of forces seeking to deter Germany from this goal.
As we have discussed, Germany is dependent on exports. Almost half of its GDP comes from exports, and Germany has thus far compensated for drops in its exports to China and the rest of Europe by depending on the U.S. and the U.K. But the U.K. is now leaving the EU and the U.S. cannot pick up the slack indefinitely.
As a result, Germany will be facing rising domestic unemployment. It will be in direct competition with surrounding countries that are in its supply chain like the Czech Republic, Hungary, Poland and Slovakia. Its clout in Central and southern European states will diminish along with its ability to hand out loans to these states. It will have an increasing number of migrants that it will have to provide for, having accepted them into the country. It will face crises in countries like Greece and Italy, which were integral parts of the German economy. They will be less likely to adhere to austerity strictures from Berlin unless Germany is willing to shell out the money necessary to bail them out – which Germany has never wanted to do and will be less able to do over time. Germany will also be desperate to find countries to buy German goods.
At this point, the priority for Germany will be survival and satisfying the domestic population, rather than propping up the European system or going along with U.S. foreign policy objectives. The EU, it must be remembered, was designed in the first place to tame Germany. Berlin was able to use the EU to enable its own economic success. The decline of the EU raises the question of what will happen when the system is no longer rigged to either declaw or enrich Germany.
This issue will be the center of gravity of European geopolitics. As Germany weakens, another great power of the 20th century will also be weakening: Russia. And while Russia faces a number of serious challenges, ranging from low oil prices to declining fertility rates and historically high mortality rates, great powers are most dangerous when their backs are up against the wall. And that is where Russia finds itself today, and will continue to find itself in the next few years.
Russia
The groundwork for this conflict has already been laid. The expansion of NATO has diluted its mission and strategic purpose, but it has also made the Russians very uncomfortable. The protests in Ukraine that set off a revolution and led to the annexation of Crimea were supported, though not directly, by Germany, France and the United States. This angered the Russians, as Ukraine was part of the historical buffer region that protected Russia from threats emanating from Western Europe.
Germany has been in the anti-Russia camp in recent years. Germany’s foreign minister was in Russia with the French and Polish foreign ministers when the pro-Russia Ukrainian President Viktor Yanukovych was booted from power in 2014. And Germany has held the line thus far when it comes to sanctions against Russia. But as Germany turns inward to deal with its own issues, it will lose some of its endurance in standing so strongly against Russia. And as Germany comes into conflict with other European countries, and as the EU’s writ continues to decline throughout the Continent, Russia will see an opportunity.
Russia will have more space to build relationships and influence in Europe. As power becomes more concentrated in regional blocks and national capitals, countries will no longer have to think about Brussels as they make their decisions, but rather what is best for them at that particular time. For some, that may include cooperation with – or at least a lack of opposition to – Russian moves in Eastern Europe. Ukraine’s future is more important to Russia than it is to any other European country or the United States. Russia will do whatever it can to, at minimum, prevent Ukraine from moving squarely into the U.S. camp, and at maximum to exert as much control as it can over the country.
Southern and Central Europe
Southern Europe’s weak economies are already a big challenge for the EU. Greece’s debt crisis raises questions over the sustainability of the eurozone, but growing economic woes in Italy – as well as continued challenges in Spain and Portugal – signal that a far more significant southern European economic crisis is underway. Italy is grappling with high rates of non-performing loans, on top of low growth and high unemployment. An Italian crisis has much more far-reaching implications than Greece’s, since Italy is the third largest economy in the eurozone. As a result, an intensification in Italy’s economic problems will have ripple effects across Europe’s major economies, potentially negatively impacting the stability of the euro, European banks and exporters.
Europe’s fragmentation will intensify Central and Eastern Europe’s security challenges. European governments have long floated plans for greater EU-wide defense cooperation, but the bloc’s growing challenges make this project more unlikely. With the U.K. – the largest spender on defense in Europe – leaving the bloc, and other European states increasingly occupied with their economic troubles, states along the EU’s eastern edge will grow apart from the rest of Europe. Central and Eastern European states will look for new economic partners and defense allies, as Russia will push to boost its influence in the region.
Muslim Migration
Intersecting all these issues is the role that Islam will play, and indeed already has played, in Europe’s geopolitics. The map below uses data released by the Pew Research Center to identify the relative Muslim population in European countries in 2010.
We used 2010 data because it was the most recent and reliable, but it should be noted that the map above does not take into account the refugee crisis, which began in earnest only after 2010. Syria descended into civil war in 2011, and the Islamic State’s rise and the concurrent breakdown of Iraqi governance occurred after this data was gathered, so these events were not factored into Pew’s estimates for Muslim population in Europe in 2020 and beyond. Germany accepted more than 800,000 migrants in 2015, and a study by the Central Council of Muslims in Germany estimated that 640,000 of those were Muslim, which puts the number of Muslims living in Germany at around 6 million.
The reasons for Brexit are many, but one of the key reasons “leave” beat “remain” in the end was the migrant issue. In the summer of 2015, Germany was still committed to opening its borders to refugees and was trying to pressure other EU members, including Britain, into accepting more refugees. At one point, German officials were all but threatening that Cameron would not be able to negotiate new terms with the EU if Britain did not pull its weight in accepting more refugees.
Britain already has a population of over 3.5 million Muslims. Numerous attacks carried out by Islamic extremists in recent years, most notably the 2005 London Underground bombings, raised fears among some British voters. At the same time, as with migration from eastern members of the EU, many working and middle class Brits feared that an influx of migrants would harm their job prospects or impact salary levels. Many British citizens were not prepared to accept Germany’s demand that they accept more refugees or suffer the consequences. One of the most basic qualities of sovereignty is the ability to control one’s borders, and even the notion that this authority would have to be discussed in a committee in Brussels was one of the driving forces that encouraged British citizens to vote “leave.”
In this sense, the Muslim population of Europe, which, not counting the recent surge in migration, was forecast to reach 10 percent of Europe’s total population by 2050, has already begun to reshape European geopolitics. Recent migration could push this number higher much faster than anticipated, which will have an effect across Europe. In the U.K., Brexit probably would have been defeated without the conflagrations in the Middle East, the subsequent migration to Europe, the inability of the EU to respond to the migration, and the attacks on European soil like those in Paris. In Germany, which has an aging population, the influx of young Muslim men from the Middle East could have unforeseen long-term effects. Germany and Russia in fact have two of the largest Muslim populations in Europe and those populations are growing more rapidly than other demographic groups.
These changes will also be affected by the continued resilience of IS, Syria’s civil war, closer cooperation with Turkey (a Muslim country that in previous incarnations ruled much of the Balkans and southern Europe) to contain Russia and stem the flow of migrants, Libya’s continued instability and other unforeseen developments in the Middle East. As nation-states assert themselves and as nationalism rises, there will be a ready-made “other” increasing rapidly in those states, and a small but consequential minority of those “others” believe Western civilization needs to be destroyed. The EU cannot address this issue at a continental level, and each state will likely deal with it in its own way.
Europe and the United States
In this fragmented Europe – where Germany must look to its own interests and Russia is looking to re-establish itself in its traditional buffer regions while it still has the capability to do so – the British vote to leave the European Union makes sense. The U.K. has been balancing between the United States and the European Continent. There is an illusion in the mainstream that by voting to leave the EU, Britain has effectively left Europe. However, Britain cannot leave Europe.
The U.K. does not have to be in the EU to be part of Europe. It will always be a part of Europe. That said, unlike most other European countries, the U.K. is not as tied up with the Continent. It has options. That does not mean it can ignore Europe, and it won’t. The trading relationship between Germany and the U.K., for example, is an imperative for both. The U.K. has been pulling closer to the U.S. in recent years, and both countries will continue to share their interest in preventing the rise of a regional hegemon on the European Continent.
France is also part of this equation and has always tried to assert its independence from U.S. strategic initiatives. But France is also on the front line of many of these issues and will have to remain in the British and American orbit while preserving enough power and independence to stand on its own two feet. France was the original core power of the European Union, and to the extent that it can, it wants to preserve some of the EU’s residual power to maintain as level a relationship with Germany as it can.
U.S. President Barack Obama said he wanted the U.K. to remain in the European Union. Obama also probably wants the Chicago Bulls to win the National Basketball Association championship every year, but that doesn’t mean it will happen. Europe has already begun to fragment, and this has defined U.S. policy in recent years.
U.S. Secretary of State John Kerry has said NATO can be a stabilizing force now that the U.K. has left the EU. This is mostly wishful thinking. The most consequential U.S. relationships on the European Continent will increasingly be bilateral and regional and will develop outside the auspices of the old institutions. The Intermarium is the idea of an alliance of countries between the Baltic and Black seas that will work with the United States to block Russian influence into Europe. The U.S. will continue to work closely with Poland and Romania, and its relationship with Turkey will also become more complicated and important to both sides. The U.K. has already played a part in this, with British fighters and troops stationed in the Baltics. It continues to play an important role, and increasingly these moves will happen outside of NATO.
Following Brexit’s Logic
The fragmentation of Europe poses other unique challenges across the Continent. It is these that pose the greatest challenge for the United Kingdom.
The United Kingdom is not a nation-state. It is made up of four nations – England, Wales, Northern Ireland and Scotland. And London is so politically and culturally distinct from the rest of England that it could almost be considered a city-state at this point. Britain voted to leave the European Union. The same logic could be used by Scotland or Northern Ireland to leave the United Kingdom.
The problem with this is how deeply embedded Northern Ireland and Scotland are in the United Kingdom. It makes sense that both voted to remain in the European Union – historical memory dictates that both should prefer to trust the European Continent over their English neighbors. But Scotland and Northern Ireland have enjoyed in the economic success of the United Kingdom over the centuries. Scotland, for example, approved the Articles of Union in 1707 because it was on the verge of insolvency and it was in its best interest to join the United Kingdom.
Even if Scotland were to get approval to hold a second referendum on EU membership (which it must by law) and even if it voted to leave, it could not leave the U.K. as simply as the U.K. can leave the EU. Scotland uses the pound. Scottish soldiers serve in the British army. Separation would be far more complicated. This is fundamentally uncharted territory, and there might be potential for some kind of compromise, in which Scotland remained part of the United Kingdom but was given more autonomy and freedom to determine its relationship with the EU.
The imperatives keeping the United Kingdom together may be weakening, but even so, they are far stronger than the imperatives keeping the EU together. In any case, it will take years for Britain to untangle itself from the EU. Even if, in the next year or two, Scotland or Northern Ireland held a successful independence referendum, it would take longer to untangle themselves from the U.K. By that point, things in the EU might be so bad that joining won’t seem like a feasible option anymore.
This is not a strictly British challenge. The map above should be striking for the number of areas and peoples that it lists. Basque Country and Catalonia are fairly well known, but Occitania is bigger than both, with over 16 million people with their own language spread across three countries (France, Italy, Spain), and with a sense of national distinctness.
Europe has gone through these cycles – of small distinct local areas being consolidated into large states or empires – in the past. The opposite is happening now, and while those that will be most vocal in pursuit of more independence will be the topic of a future study, it suffices to say that European nation-states will face the same kinds of challenges that the EU does from dissatisfaction with political elites and rising national pride. Of course, many of these states have much more history and interests in common than the various nation-states have with the European Union. But even so, they will not be immune to these forces.
The fragmentation of Europe does not just mean the fragmentation of the EU. The EU is the biggest and most consequential part of this. But Britain’s example has opened up a host of possibilities for redefining the way Europe works at the national level. It also means the continued existence of the United Kingdom or even the Kingdom of Spain as currently constituted is an open question.
The U.S. then will respond to Brexit and the fragmentation of Europe as it already has – by strengthening bilateral and regional relationships in order to achieve its strategic objectives on the European Continent. Great Britain will remain one of America’s closest allies, and will move even closer to the U.S. as it seeks to find its place between the Old World and the New.
The British vote did not cause these geopolitical forces toward fragmentation to emerge any more than policy did. They were already at work on the Continent. George Friedman forecast these developments almost a decade ago, and that forecast for the most part stands. It’s just happening even faster than we thought it would.
