Illutration by Jamie Wignall

Brexit: an island on the edge

Britain's just one corner of a European crisis in which opportunity still lurks
November 9, 2018

What do they know of Brexit who only Brexit know? As we in Britain interminably “bang on about Europe,” to recall what David Cameron said he didn’t want Conservatives to do, we are also viewing the continent through a very narrow and distorting British lens. There is scant sense here that our referendum vote was itself a very European phenomenon and just one corner of a wider crisis of the European project. We obsess about the potential impact of different kinds of Brexit on Britain, and think less, if at all, about the consequences for Europe as a whole. Yet Brexit could punch a dangerous hole beneath the waterline of the good ship Europa, while a late step back from the brink could be a pivotal moment in Europe’s recovery. A second referendum choice to stay on board could give the EU a much-needed boost, and, in time, contribute to transforming it into the Union we all need to meet the challenges of the 21st century.

For years, universities have offered classes on European integration; now, we host lectures on European disintegration. Today’s Union is simultaneously fractured along two lines—north-south and east-west. The first fault line is created by problems of political economy. Italy, with its populist government locked in budgetary battle with Brussels, is demonstrating that the fundamental design flaws of the eurozone have still not been addressed. A few years ago Romano Prodi, a former European commission president and Italian prime minister, told me—with an eloquent spread of his hands—that his country seemed to be governed by “lospread” (that is, the yield spread between Italian and German government bonds). If “lospread” widens to create a crisis of confidence, the Italian economy may prove too big to fail but also too big to save.

The east-west fault line involves a challenge to fundamental European values. Jean Monnet once said that “a dictatorship… cannot exist in the [European] Community.” Hungary under the regime of Viktor Orbán’s Fidesz Party is not a fully-fledged dictatorship, but it is certainly no longer a liberal, pluralist democracy. Poland’s populist nationalist government is also, albeit against more resistance, eroding the checks and balances of a still fragile young democracy. One reason the EU’s response to the Hungarian outrage has not been stronger is that the centre-right European People’s Party (EPP) grouping in the European Parliament cannot bring itself to relinquish the votes of its Fidesz members, even though Fidesz is flagrantly violating the EPP’s own proclaimed values. The very mechanism that was supposed to democratise the EU—pan-European parties, such as the EPP, with their Spitzenkandidaten (lead candidates) for the Commission presidency—has undermined its readiness to defend democracy inside a member state.

"One hears a kind of xenophobic, reactionary, nationalist rhetoric that recalls the 1930s"

Compounding Europe’s internal frailties is a chilling constellation of forces beyond its borders. Vladimir Putin’s Russia has unilaterally annexed a chunk of territory from a neighbouring, sovereign country—behaviour Europe has not seen since the times of Hitler and Stalin—and the EU has proved unable to do much about it. Putin loses no opportunity to divide and weaken the Union, whether with the help of fellow travellers such as the Czech president Milos Zeman, or through his covert disinformation warfare, which clearly played a role in the 2016 Brexit referendum vote. China uses its growing economic influence in countries such as Greece and Hungary to get something close to a seat at the EU’s decision-making table: a separate 16+1 grouping of East European states plus China met just before a recent EU-China summit.

The United States, too, is increasingly preferring to do business with particular member states—especially Germany and France. Donald Trump’s “America First” nationalism further weakens transatlantic support for the project, values and interests of the EU. Brexit, if it happens, would be the first time an entire member state (as opposed to Danish outpost Greenland, which left in 1985) has chosen to leave the Union.

Together, all these elements of disintegration place a huge burden on Europe’s central power, Germany—a burden that it is not in good shape to shoulder. Strong, civilised and centrist leader though she has been, Angela Merkel fatefully allowed a simplistic narrative of the eurozone crisis to take root at home, according to which the Germans are the innocent, industrious, virtuous victims of lazy, irresponsible south Europeans. Precisely because Germany itself is prospering, it is very hard to persuade the German public of the need for energetic, radical EU reform of the kind being advocated by France’s Emmanuel Macron. “Aristocrats don’t vote for revolution,” a senior Macron adviser explained to me. It took me a moment to realise that the aristocrats in this 1789 analogy are the Germans, which presumably makes the French the sans-culottes.

Merkel’s 2015 decision to let in close to a million refugees has catalysed a fragmentation of German politics—and this October the Chancellor acknowledged that her days in charge are numbered. Meanwhile, like other centre-left parties across the developed world, social democrats in Germany are in disarray. Although a lot of their voters have gone to the Greens, some have defected to the far-right Alternative für Deutschland (AfD), which now regularly achieves a double-digit percentage of the vote. Since four out of five AfD voters assess their own personal economic situation as good or very good, the party’s performance cannot be explained by “It’s the economy, stupid.” Rather, as I have argued elsewhere, it’s the Kultur, stupid.

The reaction against a real (in west central Europe) or (in east central Europe) merely threatened influx of immigrants has undermined one of the great achievements of the last 30 years of European integration: travel without any border controls within the Schengen area. Now some of those border controls are back—“temporarily,” of course. From the AfD to Marine le Pen in France, Geert Wilders in the Netherlands and Matteo Salvini in Italy, one hears a kind of xenophobic, reactionary, nationalist rhetoric that recalls the 1930s. In Hungary, Fidesz drums up electoral support by spreading conspiracy theories about a Jewish billionaire, George Soros, who survived Hungarian and Nazi fascism as a child in Budapest.

"70 years of peace? Tell that to the Baltic nations, the Czechs, the Spanish, the Portuguese, the Poles"

Merely listing some of the things that have gone wrong in Europe over the last decade, it’s easy to work oneself into a hyperbole of despair. But how bad is it really? We have been through difficult periods before. One of post-1945 Europe’s characteristic features has been almost manic-depressive mood swings between lows of Europessimism and highs of EUphoria. Is this just one more crisis in the EU, or is it a crisis of the whole European project? To get some perspective, we turn to history.

Although Britain, as a state, has been an awkward member of the EU, British historians have made a signal contribution to understanding its past. One thinks of Norman Davies’s Europe: a History, Tony Judt’s Postwar, Mark Mazower’s Dark Continent, Richard Vinen’s A History in Fragments and Harold James’s Europe Reborn, to name but a few. Now we have Ian Kershaw’s two volumes in the Penguin History of Europe: To Hell and Back, which covers 1914 to 1949, and Roller-Coaster, which boldly goes from 1950 all the way up to 2017.

To read the nearly 1,100 pages of Kershaw’s two-volume history is to watch a master-carpenter hitting nail after nail soundly on the head. He is unbelievably accurate; he covers north and south, east and west, small countries and large; he somehow manages to embrace political, social, economic, military and cultural history; he mixes narrative, description and analysis, offering mature, nuanced judgments. There is a strong central thread of the major political developments, but also a judicious sprinkling of what the Germans call Alltagsgeschichte, everyday history. Thus, for example, Greece’s terrible immiseration during the eurozone crisis is illustrated by the experience of a 55-year-old plasterer: “‘From one day to the next,’ he recounted in February 2012, ‘the economic crisis hit me. Suddenly I was fired without any compensation… Two months later I couldn’t even afford my rent. All my savings had gone on paying medical bills for my late wife.’ He was evicted from his flat and for four months slept in his battered Toyota. Then he could no longer afford petrol for his car. He had to seek refuge in a shelter for the homeless. ‘It was a big step asking them for a bed,’ he remarked. I felt very ashamed.’”

While warning lights were already flashing in the 2005 French and Dutch referendums that rejected the proposed European Constitution, Kershaw rightly dates the beginning of what he calls Europe’s “crisis years” to the 2008 financial crisis. The average debt of EU member states rose within two years from around 58 per cent of GDP to 73 per cent. In Greece and Spain, two out of every five young people were unemployed. What might have looked like a neo-Keynesian response to the crisis was, Kershaw argues, only neo-Keynesianism for the banks; it was austerity for everyone else. This came on top of staggering -levels of income inequality: by 2014, the median pay of top executives in Britain was £4.4m a year, whereas median national pay was at least £26,000.

Although cultural factors are as important as economic ones in explaining the epidemic of nationalist populism, it is hard to imagine that the outbreak would have been half as virulent without the 2008 crisis and the one-sided responses to it. Moreover, the cultural and the economic are often intertwined. Visiting Barcelona earlier this year it was clear that the dramatic upsurge of the Catalan nationalist push for independence was also catalysed by the 2008 crisis, with the eurozone politics of austerity fuelling Catalans’ resentment at what they see as an unequal, unfair economic relationship with the Spanish central power. In this sense, the Brexit referendum vote is just one manifestation of a pan-European epidemic, with each of the patients exhibiting particular national symptoms.

Using a football analogy, Kershaw suggests that Europe’s 20th century is a game of two halves—“perhaps with ‘extra time’ added on after 1990.” In the first volume, he describes how Europe descended into “hell on Earth,” in total war, Holocaust and gulag, but goes on to explore what he calls the “matrix of rebirth” that resulted from the disaster—hence his title, To Hell and Back. I’m tempted to suggest that his second volume might have been called To Heaven and Back, since Europe at the end of 2004 was arguably in about as good shape as it has ever been. But of course that must remain a joke, since one thing we learn from history is that while human beings are capable of building hell on Earth, if they ever seriously set out to make a heaven on Earth, they end up building another hell.

In his first volume, Kershaw identifies four “interlocking major elements of comprehensive crisis, unique to these decades” that led to what he calls “Europe’s era of self-destruction” between 1914 and 1945:

“(1) an explosion of ethnic-racist nationalism; (2) bitter and irreconcilable demands for territorial revisionism; (3) acute class conflict—now given concrete focus through the Bolshevik Revolution in Russia; and (4) a protracted crisis of capitalism (which many observers thought was terminal).”

Reading that, I found myself thinking that the only one of those four elements we generally don’t have in the Europe of 2018 is (2), with Putin’s Russia—its seizure of Crimea and low-level war in eastern Ukraine—being the exception that proves the rule. Of course we also don’t have (1), (3) and (4) in the same measure as we did in the 1930s, but in post-2008 nationalist populism we can detect elements of ethnic-racist nationalism, class conflict and a crisis of capitalism. Kershaw himself is reassuring on this comparison. Although “the only certainty is uncertainty,” he argues that we have come through the last decade of crisis incomparably better than Europe did after 1929.

And today, Europe “has at its centre, as its most powerful and influential country, a peaceful, internationalist Germany—the starkest imaginable contrast to the Germany that in the 1930s and 1940s -trampled human rights into the dust and almost destroyed European civilisation. Europe has fought for and won freedom. It has acquired prosperity that is the envy of most of the world. Its search for unity, and for a clear sense of identity, goes on.” Thus, like those other British historians of Europe, he ends on a note of appropriately cautious optimism.

The only thing I don’t like about Kershaw’s second, masterly volume is his title, Roller-Coaster. At the fairground, rollercoasters shoot up and down, but you end up back where you started, which is hardly the case for postwar Europe. In a broader sense, as in the phrase “emotional rollercoaster,” it just means a series of often sharp ups and downs. I call that life. There is, however, one lesser-known meaning of rollercoaster which is perfectly fitted to this moment. In surfing, a rollercoaster is a manoeuvre in which the surfer ascends the face of a wave and then at the last minute flips round, bouncing off the foamy crest and triumphantly whizzing down again. Faced with the giant wave of anti-liberalism, this is what we have to do—a liberal, pro-European rollercoaster. And Britain has a vital part to play in this daring manoeuvre.

As the remaining 27 member states of the EU head into European elections next May, the Orbáns and Salvinis are making the running, with parties of the centre-right trying to steal their clothes but ending up dancing to their tune. “30 years ago we thought that Europe was our future,” Orbán said earlier this year. “Today we believe that we are Europe’s future.”

But there is a powerful counter-movement forming, led not by the old parties of the centre-left but by Macron. Macron is not just a brilliant and passionate speaker; he can at moments also be profound. In Aachen earlier this year, on the occasion of his receiving the Charlemagne prize, I heard him demolish what he called the “myth” of 70 years of peace in Europe. 70 years of peace? Tell that to the Baltic nations, the Czechs, the Spanish (remembering Franco’s dictatorship), the Portuguese (remembering Salazar), the Poles, the peoples of former Yugoslavia and Ukraine! Macron’s fundamental insight is that Europe must be built on a consciousness of the tragic dimension of its past and present, le tragique de l’histoire.

“Only those who have lived in a police state can know what it is like not to live in one,” commented the Oxford political scientist Peter Pulzer, whose family fled Austria just in time to escape the Holocaust. Kershaw quotes this and adds that “only those who have experienced outright destitution really appreciate what it is like not to be poor… only those who have witnessed at first hand the horrors of war understand what it means to live in peace.” As an observation on human nature, this is tragically true. But one of the main purposes of studying history is to try to learn from the past without having to go through it again ourselves. That is Macron’s point.

Brexit has, albeit in a less tragic key, had the galvanising effect of a prospective disaster. As a lifelong English European, I never dreamed that I would witness the scene in central London on Saturday 20th October, with as many as 700,000 people turning out to demonstrate for a second referendum (or People’s Vote), bearing handmade placards proclaiming “Fromage not Farage,” “Freedom I will not give EU up” and a very English “The EU is Rather Good.”

The tragic-farcical spectacle of Brexit—and the fear that it stirs of a wider unravelling—has given a similar positive impetus across the continent. Wherever I go, be it in Ireland, Denmark or Poland, I find that, far from inspiring imitation, Brexit has actually strengthened support for membership in the EU.

In recent Eurobarometer polls of public opinion across the EU (still including Britain), 75 per cent of those asked say they are happy living in the EU, 70 per cent say they feel they are citizens of the EU, 56 per cent feel attached to the EU, and 58 per cent say they are optimistic for the future of the Union. (For their part, Britons envisage Europe sticking together and that the UK may one day rejoin; see Prospect’s new polling.) The aggregate results obviously conceal big differences between countries. More Europeans still “tend not to trust” the institutions of the EU (48 per cent) than trust them, but then most have low levels of trust in their own national institutions as well. Significantly, while nearly half of those asked disagree with the statement “my voice counts in the EU,” this is down from a massive two thirds in 2013, at the height of the eurozone crisis.

So there is still a bedrock of public support on which to build a new reform agenda. Macron has such an agenda, starting with steps to fix some original design flaws of the eurozone. You don’t have to agree with every one of his proposals to welcome their thrust. Old and new liberal forces are stirring across the continent, including in Hungary and Poland, and Macron’s En Marche is seeking alliances with parties in the Liberal Democrat (ALDE) grouping in the European Parliament. Remarkably, one of Merkel’s potential successors as leader of the Christian Democrats, the conservative Friedrich Merz, has recently co-signed an open letter calling, among other things, for a eurozone-wide unemployment insurance scheme. I don’t want to overstate the probability, but there is a chance that by this autumn we could have a new correlation of forces in the EU, including a strong Orbánite nationalist-populist opposition, but with a more reformist, pro-European alignment having the upper hand.

"Only those who have witnessed at first hand the horrors of war understand what it means to live in peace"

The test would then be whether it could initiate overdue reform. How might that look? This is not the place to delve too deeply into the grim science of European institutional architecture, but here’s one interesting suggestion. It comes from the distinguished French intellectual Jean Pisani-Ferry and colleagues at the Bruegel think tank in Brussels. They propose a stripped-to-essentials “bare bones EU,” to which all member states would belong, “built around the customs union and the single market, together with the set of policies that are indispensable to make them viable.” On top of this “common base,” there would be four clubs—economic and monetary union; migration, asylum and Schengen; security and foreign policy; other policies—which members could join on an opt-in basis. Supervising the whole would be a common court system.

Again, one can argue about the details, but it seems to me that a Union reformed on these lines would better accommodate the diversity that is producing such strains in today’s EU. What is more, one glimpses here a possible place for Britain in a possible future European Union which even moderate British Eurosceptics might accept. Britain could, for example, be an important player in the foreign and security policy club, while not belonging to the migration and monetary ones. Yes, this would require some continued supranational jurisdiction, but in return you would maximise both British prosperity, through the customs union and single market, and British global influence, through the foreign policy club.

Now here’s the rub. Britain has zero chance of helping to reform the EU if it leaves it. If, however, we choose through a second referendum to stay in the EU, we can make a major contribution to that shift. I’m not suggesting that we would be welcomed back like the prodigal son. After more than two years of Theresa May demanding the impossible, in order to appease the unappeasable in her own party, many Europeans are fed up to the back teeth with an incompetently perfidious Albion.

But objectively everyone must recognise that a British exit from Brexit would be a massive shot-in-the-arm for the post-1945 project of closer co-operation between the people and states of Europe. And it would keep inside the key decision-making bodies—European Council, Commission and Parliament—one of the strongest advocates of the reform that this Union badly needs.

Were the pro-reform forces to emerge triumphant from May’s European elections, a new British government could swiftly reconnect with reform-minded north European allies, such as Merz, Mark Rutte, and the dynamic former Finnish prime minister Alexander Stubb. Eurozone and Schengen reform would depend on Germany giving a stronger answer to Macron, who faces formidable challenges of his own at home. Yet Macron, happily endowed until 2022 with the extensive presidential powers designed by Charles de Gaulle, would be keen to co-operate closely with the UK on foreign and defence policy. None of this will be easy but, in time, working with other liberal, pro-reform states and forces, we could move towards a better Union for the next generation.

In order to do any of this, however, our MPs need first to vote down whatever fudged “deal” May brings to parliament, and then, in a second vote, take the fundamental question back to the people. We have only weeks to make that happen. By the time you read this, it may be too late. But if it is not, please do everything you can to sway every MP you know, and persuade them to put country before party and self. The case for Britain staying in the EU can be made on grounds of national interest, but that national interest has throughout history depended also on the condition of the continent. Anyway, to adapt John F Kennedy: do not only ask what Europe can do for Britain, ask also what Britain can do for Europe. This is the moment, the chance of the crisis. Let us help Europe perform the world’s finest surfing rollercoaster.

Now read: We didn't have to do Brexit in this damn silly way