Policy Paper §1: Brexit. Effects on Continental Europe and the Bulgarian Presidency of the Council of the European Union.

Policy Paper §1: Brexit. Effects on Continental Europe and the Bulgarian Presidency of the Council of the European Union.

1-07

Teodor Kalpakchiev

With 52% of votes cast, the Brits decided to leave behind 46 years of intense, yet strenuous and complex cooperation with their adjacent continental partners. Dividing lines have existed for long – beginning from the way we prepare our breakfasts to the way politics are conducted. In essence, for its long account of wealth concentration, made possible through the continuous development of war, industrial and financial capitalism, the Kingdom has allowed itself constant breaches of one of the fundament principles of human rights and intergovernmental cooperation – equality. Interferences into the domestic affairs of other countries has herewith reached a historical zenith of impunity, foreshadowed by a colonial might made possible by a permanent war-like state of affairs. The combination of a strong bureaucracy, a mighty fleet, as well as the exploitation of the cheap labour force and abundant resources has further allowed its leap into the industrialization age in the latter part of the 20th century. Successful as this society might be, it has benefited those who have managed to squeeze the best of these developments, as their counterparts have struggled to compete with the influx of migrant workers and wealthy well-educated upper intermediate class.

What role for Education?

Bewildering as it is, Britain is one of the world’s centers of education and research, which is absorbing around 16% of the Horizon 2020’s financial injections aimed at speeding up the scientific development of a new society. Today’s choice would literally mean that the sharing of best practices would significantly diminish, unless fed by bilateral budget support. Thus, for example, a Czech researcher would find it difficult to participate in a consortium at the University of Cambridge or a Manchester scholar would no longer be welcome to share his neoliberal views in the Aula of the Sofia University. Instead, England would have to rely much more on its Commonwealth for these exchanges. Potentially, there would be a stronger influx of English students in EU’s universities than vice-versa. Considering the fact that the division of the voters mirrors their educational census and their belonging to certain classes, it is quite probable that many of those who remain will be further stratified and radicalized due to the reduction of possibilities for the internationalization of a degree.

Countering the Negative Spill-Overs

Spill-overs onto other net contributors to EU’s common budget, such as the Netherlands, which is led by a radical conservative party helped by Turkey, as well as Denmark, which is boasting one of the most advanced and restricted economies, are highly possible. The precedent that any country could later leave unilaterally would be transposed into higher bargaining power for the smaller, eastern member states, as they could potentially any time decide to withdraw their membership for the sake of joining the Eurasian Union. Elements such as the presence of the Russian factor, as well as populist nationalism as a result of the politics of austerity and the obligation to participate in the new migration policy under the German leadership are to remain the most disuniting. It is up to the European parliamentarians and the elders in the Commission to continuously communicate the negative consequences of an “Exit” to the economy.

(Dis-)United Kingdom’s new place in EU’s internal order

What is important now is that the EU begins a twofold process of renegotiation. One of its arms must cater for Britain’s new role, which would be either similar to that of Albania or of Norway, resp. strenuous re-accession pathway or European Economic Area type of market access in expense for adoption of policies dropped down from Brussels. Third possibility could be its inclusion in the quasi-regulatory space of the Neighbourhood, which is defined by continuous granting of mobility rights and access to EU’s own funding in expense for conditionality. Such a form of external governance might possibly be directed at the transformation of the British offshore companies into transparent enterprises, as well as to the relocating financial institutions such as the European Banking Authority and the European Bank for Reconstruction and Development into mainland Europe.

Whilst losing the ability to exert its sovereign right to exercise authority over the formulation of EU’s policies, Britain would most possibly attempt to retain the access to the policy and physical networks created by EU, such as the scientific exchanges, cooperation among NGOs and SMEs, the TEN-T transport corridors, the energy transportation networks, lower roaming tariffs, ability to litigate in front of the European Court, the information databases on aviation, etc. When it comes to the mid-term future, which is inextricably linked with the organization of a new European constitutive assembly and the adoption of statehood elements, such as a common treasury, investigative capacities, army and foreign policy, the United Kingdom will most possibly be denied access to the latter two. The traditional, realist branch of EU’s foreign policy will thus lose its approximation to the transatlantic priorities and would become much more diversified and based on policy dialogue and export of governance recipes. In such a situation questions that would arise are connected with whether the UK will in a way be subjected to or will readily seek a formula for participation in mechanisms such as internet security, consumer protection, the emissions trading system and adaptation towards competitiveness. Many of those would possibly be dependent on contractual budget support by UK fed into EU’s own account or directly into consortia.

Effects on the European Parliament, Financial Governance and Regionalization

It is by no surprise that the complex governance solution brought to being by the old democracies in the European Union’ asymmetry has resulted in such an erroneous shock. Being guided by a club of elderly national and transnational governors, who ascend to the status of a commissioner, responsible for all member states and counterbalanced by a parliament that does not correspond to the traditional notion of such due to the lack of genuine opposition and its actual policy borrowing and culture of unanimity, the governance apparatus of the EU often does not distinguish among and depend on the policy-making based on competing ideas of transnational political families. By means of a permanent, policy-driven equalization and approximation of preferences, the European political parties have been unable, on one hand to come up with distinctive political platforms and on the other hand to defend them. It is only in the European Parliament and possibly the parliaments of illiberal, undemocratic and despotic regimes, such as the neighbours Belarus, Russia, Turkmenistan, North Korea, Laos and Vietnam that there has been no real ambition for the creation of an opposition. One begins to ask himself – what exactly is the master plan for future development of the Union – is it a loose confederation of states, or really a powerful executive federation with the elements of a state?

Britain’s mere participation in the discussions over the development of the EU have strengthened the notion of confederal inter-governmentalism as opposed to the federal dream of the founding fathers of the EU. For being a state largely defined by the mystical glory of its past, the Island has sought the preservation of the traditions in statehood and sovereignty. Thus, with USA, Australia, Singapore, India and other countries fortifying its back, it has sought a state-to-state dialogue, which provides it with clear superiority, rather than one based on the formulas derived from the size of its population and territorial surface. From a reverse psychology perspective, one can expect that the European family of states would attempt to creatively destruct itself by turning the “losing” of a state into its evolution towards a state-like entity. For that to happen, there must be above all similarity of preferences in the Council, followed by hearings of representatives of national parliaments in the European Parliament and finally – a selection of trans-European networks and movements.

In that sense the British vote could trigger at least two developments. One would be transformation of the European Parliament into a body that is partially driven by its opposition, whose policies are not borrowed alongside the political spectrum and which is able to collect the will of its federal republics. Whether the adjustment of the seats in the European Parliament would mean a power transfer to the newly acceding European Radicals, the European Left, the Greens or Verhofstad’s federalism-leaning liberals is, however, not yet clear. Still, the post-Brexit order would definitely mean the creation of an opposition movement, aimed at rebuffing the ideas of the red-green-yellow political spectrum, as already attempted by Varoufakis’ DiEM25. The most important players in such a game, especially as Europe is build on the ashes of the Second World War, will be most potentially the European Left as the traditional counterweight to the block of populist radicals. The question is whether the Left would adhere to the already established central coalition, or whether it will attempt to reunite the rest of the forces in the European transnational political order.

The second would be the rethinking of the financial governance of the EU, which has so far had two branches – the German tradition of post-war austerity and the British tradition of deregulating financial affairs. The existence of such a poli-centric, states embedded policy creation has only fed the actual decomposition of the European statehood into a multi-level architecture, where regions and transnational movements are increasing their relative importance. It is therefore important to see under whose leadership the currently existing sub-federal macro-regions will be turned will channel their will. We could therefore speak not of three, but four-level governance consisting of cities and their regions, member states, macro regions and EU’s machinery.

Region Countries
Norden Finland, Sweden, Denmark, Finland, Estonia
Central France, Germany, Switzerland
Roman Italy, Spain, Romania
Visegrad Poland, Hungary, Czech, Slovakia
Balkan Western Balkans, Bulgaria, Croatia, Greece

 

Figure 1. Regional Blocks (by Author)

 

integration-rings

Figure 2. Integration Rings (by Author)

 

The highest burden would fall on the peripheral countries on the external borders of the EU, which will have to attempt to both integrate themselves in all integration rings, while competing for influence in the Western Balkans and the Neighbourhood. Currently, as a result of numerous opt-outs and renegotiations, the European polity is shaped into concentric integration rings. These must be gradually swept away by means of ensuring the Member States’ full participation. Instead, they must become the driving engines of EU’s conditionality behind its external borders and be used to establish competition for integration leadership in its adjacency.

The Council Presidency

The United Kingdom was to be the leader of the Council trio together with Bulgaria and Estonia. Potentially, the synergies amongst these three countries would have possibly invoked a focus on anti-corruption and good governance, e-government and digital single market, consumer protection and on the external side – the Eastern Neighbourhood. For its descent, now the two countries have a couple of options at hand – either begin their presidencies earlier and seek partnerships with the countries before and after them, or seek guidance through the establishment of a team by a large member states. Due to both of the countries’ strategic interests in the Eastern Neighbourhood – notably Estonia’s capacity to defend itself against cyber and hybrid security threats emanating from Russia and Bulgaria’s policy of reuniting the remains of the Proto-Bulgarian nomadic tribes in the Caucasus and southern Ukraine through support for their integration the most appropriate expertise would come from the Germany-Poland-Sweden trio, which could provide the necessary guidance.

That would be especially helpful in view of uploading certain policies on the EU’s policy-making agenda, as well as to reinvigorating the national administration capacity to set mid-term priorities. From a Bulgarian perspective these must be the decomposition of the horizontal networks existing in the judiciary, the achievement of transparency in assets ownership, the accession to the Baking Union, the sustainable rebuff of the economy through energy and resource efficiency, the preservation of cultural and historical sites around the Black Sea basin, creating professional, educational and policy networks with the Neighbourhood countries and reviving the old partnerships with Laos, Vietnam and Central Asia. Thus, Bulgaria would be able to engage itself in a comparative rethinking of its communist past, which is quintessentially the only way to adjust its governance structures and rethink its politico-energy partnership with Russia.

Conclusions and Policy Recommendations

The United Kingdom has embarked on a self-destructive pathway of isolationism and extremism, which it has already started to regret due to the signals of the financial markets. Its disunity is alongside cleavages of educational census, belongs to certain classes and age range and is not shared by 75% of its youth. These are expected to seek retaining their rights to participate in EU’s educational and scientific networks. The precedent would possibly give new hopes for the radicals in the European Union, which will have to be countered by achieving symmetry of information. There leave of the United Kingdom leaves a vacuum created by its presence. Previously filled by inter-governmental sentiments it’s highly probable that it will now result in a broad coalition of supporters of federal developments.  For the European Parliament the readjustment could potentially mean the creation of a viable opposition, while in terms of financial governance the remaining institutions in the London City would potentially have to be relocated. For a potential rethinking of EU’s statehood to take place the full participation of all of the member states and the transcendence of the multi-speed integration onto EU’s surroundings must be ensured. Internally, EU’s (macro-) regionalization can potentially turn into the driving force for channeling ideas and preferences for its future development. Last, but not least, the descent of UK’s from the common presidency with Bulgaria and Estonia could mean seeking alternative recipes for an expert-guided presidency under the auspices of Germany, Poland and Sweden. This would allow the two countries, Bulgaria and Romania to retain their national priorities and successfully upload them onto the EU’s policy-making agenda.

Recommendations to EU:

  • Maximize the communication of the negative effects of potential further “exits” to minimize potential spill-overs onto Netherlands and Denmark
  • Retain strong position on UK’s membership by retaining tariff barriers, but allow for the free movement of workers back to the continent and the participation of youth in EU’s policies, while conditioning those on budget support
  • Carefully consider potential net benefits of having British participation in certain networks, such as transportation, internet and communication, education and science, etc.
  • Bargain the relocation of the financial and development institutions based in London back to Continental Europe for UK’s participation in some of the policies that lead to net benefits for EU
  • Ensure European Parliaments’ gradual transition to a hearing chamber for national parliament’s ideas on the future of the EU and the creation of an opposition to ensure platform-driven policy-making
  • Set the coherent participation of all Member States as one of the defining priorities of the Future Union, while exporting the multi-speed integration onto all the neighbouring countries with the help of conditionality
  • Alleviate the creation of an expert group from large member states that will guide the two small countries’ Presidency of the EU

 

Recommendations to UK:

  • Reconsider its role in the European Union and the readiness to participate as a full-fledged member with no opt-outs and rebates or alternatively a Neighbour with the right to support certain EU policies for the right to partake in them (education and science, energy transportation, emissions trading, etc.)

 

Recommendations to Bulgaria:

  • Seek guidance for the common presidency of the Council of EU under the leadership of Germany, Poland and Sweden, so as to ensure the uploading of national priorities
  • Engage in policy dialogue with Estonia to effectuate learning from its successes in the establishment of an e-Government, accession to the monetary union and cyber security
  • Create a working group on the transparency of assets’ ownership and the accession to the Banking Union with the participation of experts from the European Banking Authority, the ECB, the German Banking system and the Commission (ECOFIN).
  • Begin establishing regional policy, science and education, business and cultural networks with the countries from the Black Sea region, so as to ensure ties and partnerships are already present at the advent of the Presidency
  • Engage in dialogue with the Netherlands in order to ensure that the block on the accession to Schengen is removed, while ensuring that the loss of the own visa policy would not harm the national budget
  • Engage swiftly in a dialogue with the United Kingdom to ensure that the security and labour rights of Bulgarian seasonal and migrant workers would be kept to highest standards
  • Prepare to defend strong positions for the protection of the Bulgarian minorities in Besarabia, Crimea, North Caucasus and Tatarstan

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