E.U. Countries Warn Britain: You’ll Pay if You Leave Us
If Britons do vote in a referendum on Thursday to leave the European Union, they can expect a tough and unforgiving response, with capitals across the Continent intent on deterring other countries from following the British example, European officials and analysts said.
In other words, Britain will be made to suffer for its choice.
With other issues pressing, including Greek debt, the migrant crisis and terrorism, the largest and most powerful European nations will want clarity, and are not likely to tolerate a long period of post-referendum confusion.
“In is in — out is out,” the powerful German finance minister, Wolfgang Schäuble, told Spiegel magazine. “I hope and believe that the British will ultimately decide against Brexit. The withdrawal of Britain would be a heavy loss for Europe.”
The president of the European Council, Donald Tusk, spoke apocalyptically about a British exit, or “Brexit,” to the German tabloid Bild. He said all members of the European Union would suffer, as would the postwar structure of Europe that had kept the peace.
“Why is it so dangerous?” Mr. Tusk asked. “No one can foresee what the long-term consequences would be. As a historian, I fear that Brexit could be the beginning of the destruction of not only the E.U., but also of Western political civilization.”
Britain would face at least seven years of limbo during painful negotiations about a new relationship with the bloc, Mr. Tusk said.
Preparing for a British vote to withdraw, France and Germany are debating the immediate announcement of a joint initiative on European security, perhaps an operational command headquarters, to show, at least symbolically, that the European Union remains solid and will continue to progress without Britain.
But Germany has rejected some ideas from the European Commission, the permanent bureaucracy in Brussels, to respond by moving quickly toward more European political or fiscal integration, understanding that with Spanish elections this month and French and German elections next year, “more Europe” is not what voters want.
And no government wants treaty change, which would prompt more referendums at a time when populist, anti-Brussels sentiments are running strong across the Continent.
Suggestions by British politicians favoring a departure that the rest of the European Union will give Britain more favorable terms in a new trading arrangement will be rejected out of hand by European leaders, who do not want to make further concessions to a country that has rejected them, officials said. This would ensure that the British example discouraged others tempted to seek a special deal for themselves.
To that end, the main European Union nations are envisioning a two-stage negotiating process for a British exit, once the British government invokes Article 50 of the treaty governing membership in the bloc. Article 50 provides two years to haggle over the terms of a divorce from the bloc — something that has never happened.
The European Union is expected to want to talk about a future trade agreement only after Britain and the other 27 nations in the bloc have made a decision about how to unwind British membership. That process would require resolving complex legal and financial issues and addressing all kinds of topics that would affect ordinary people — what happens to pensions and health coverage, as well as the immigration status of European citizens working and living in Britain, and that of British citizens in the bloc.
Officials want to negotiate future trade and financial services arrangements with Britain as a nonmember; they do not want to allow Britain to use the status of European citizens in Britain and their rights as a bargaining chip in the trade negotiations, which could take several years to conclude, beyond the two-year time limit for exit talks.
Even then, Brussels would offer Britain one of the three existing models of varying closeness and mutual obligation — the bloc’s arrangements with Norway, Canada and the World Trade Organization — rather than offer to negotiate something new, said Charles Grant, the director of the Center for European Reform, a London research institution.
France and Belgium, and probably Germany, are almost certain to reject any British proposal to remain within the European single market — even, or especially, for financial services — without at least an agreement that Britain continue to allow European citizens to live and work in Britain, analysts and officials said. In any case, such a trade-off, the so-called Norway model, is strongly opposed by British advocates of withdrawing from the bloc, in the name of controlling immigration.
“There is no appetite to be nice on the day after,” said Camille Grand, the director of the Foundation for Strategic Research in France. “Whatever the British say or feel, there will be a price to pay, if only to prevent further attempts to exit the E.U.”
The French message, Mr. Grand said, is like Mr. Schäuble’s: “If you leave, you leave. And we won’t grant you the benefits of the single market. You won’t move to an à la carte membership.”
The Germans and the Dutch, Mr. Grand said, “might be tempted to be more flexible, but in Paris, it’s a divorce, and we must be tough with the British to prevent the Czechs or whomever from trying to make their own deals.”
But it may be the political aspect of a British exit that worries Europeans the most, coupled with the expected financial shock, said Guntram Wolff, the director of Bruegel, an independent research institution in Brussels.
“Populists throughout Europe will celebrate this as a ‘feast of democracy,’ where finally the citizens get their say over the elites,” Mr. Wolff said. “Populists all over Europe will gain in strength. And markets could react by saying, ‘The first brick is out of the wall, and now let’s bet on another brick.’”
The next brick, Mr. Wolff, said, could be economically troubled Italy, and that “could set in motion a domino effect,” with the euro dropping sharply in value along with the pound. So the European Central Bank would have to be prepared to prop up the banks and the euro against market pressure, just as the Bank of England would have to prop up the pound.
No one in Germany thinks it would be good if the British left, said Daniela Schwarzer, the director of the Europe program at the German Marshall Fund in Berlin. “If the European Union is not able to prove that membership is worth having, and that in the end emotion wins over rational debates, this not only tells you something about public sentiment in Britain, but will have a contagion effect in other nations,” she said.
Added to European instability, Ms. Schwarzer said, the immediate economic shock could badly damage countries with high debt, like France, Italy and Greece.
Even if the British vote to remain, “this Europe of multiple speeds may continue to disintegrate,” said Emmanuel Macron, France’s economy minister. “But if the U.K. leaves, we will have this risk squared. Are we capable of keeping the founding promises that led to the union’s creation — peace, prosperity, freedom?”
The effect on the bloc of a British departure would be threefold, Mr. Grant said.
First, he said, a British withdrawal would be a big boost to nationalist, anti-European Union movements, with Marine Le Pen, the leader of France’s far-right National Front, already comparing a British exit to the fall of the Berlin Wall.
“It’s not that the right will win power, but they’ll feel they have history with them, and pro-European elites in government will be on the back foot and afraid of moves toward more integration,” Mr. Grant said. “Federalism would be dead, and there would be no more referendums and treaty changes for generations, so it would be a new period of national power and not the federal future the European Commission wants.”
Second, he said, without the counterweight of Britain, “the German problem becomes more acute.” Rome, Paris and Warsaw fear that without Britain as a countervailing force in the bloc, Germany would become too powerful. The Germans themselves fear that an anti-German alliance would form.
Third, he said, the European Union without Britain’s free-market influence would be more French in its economic policy outlook and more protectionist, with little impetus for free-trade deals or for the extension of the single market to services.
“The stakes are high, because what happens in Britain will set off a domino effect and possibly a cycle of disintegration,” said Mark Leonard, the director of the European Council on Foreign Relations. “The European Union would look like a broken project, a declining power.”
Radoslaw Sikorski, a former Polish foreign minister, said a British departure from the bloc might have some benefits for those who want the nations of Europe to continue drawing closer.
“Europe could forge ahead with a common security policy, which the British have vetoed repeatedly,” he said. “And the countries of the eurozone would probably insist on all euro trade being moved out of Britain,” which could help efforts by Paris, Frankfurt and Luxembourg to establish themselves as more important financial centers relative to London.
But over all, Mr. Sikorski said, “the European Union is much better with Britain in it, providing liberal politics, liberal economics and a center of democratic political consensus of a kind needed now in Europe.”