Brexit Decision: The UK Needs to Become the EU's New Best Friend

The clear decision of the British people that they want to leave the EU is now opening up a period of uncertainty and intense debate, the outcome of which will shape the UK's security and prosperity for decades to come. The development of a new model for co-operation with its European neighbours must now be the UK’s primary strategic policy priority for the foreseeable future. 

The institutionalisation of co-operation between states – most of all, through NATO and the EU – played a key role in underpinning the continent’s security since the end of the Second World War. It continues to do so – enabling co-operation to meet common challenges and containing the competitive nationalisms that were so damaging to Europe in the past. 

While the case for European co-operation remains as powerful as ever, its institutional form can change over time, in response to new challenges and new political realities. The challenge that both the UK and its European partners now face is to agree on how to create such new co-operative frameworks, faced with the reality of an impending UK exit from EU membership. It will not be easy to reach agreement. But the costs of failure – for both the UK and for its European partners – will be high. 

Politics 

The UK is now on the EU’s exit ramp. But the destination of this journey remains shrouded in uncertainty. Supporters of the Leave campaign are a broad coalition, ranging from the highly liberal to the intensely protectionist, coming from all political parties and none. But this coalition could now well splinter, as the national debate moves swiftly on to how to define the country’s objectives in the negotiations that lie ahead. Initially, much of this debate will centre on the question of the next prime minister, now that David Cameron has announced his intention to step down this autumn. But the debate is also likely to lead to intense discussion, and division, across most other political parties, within business communities and in society in general. Perhaps ironically, Europe now seems set to take centre stage in the UK's political discourse for some time to come.

The central question in this debate will be on the nature of the desired relationship with the rest of Europe. 

Economics 

In the immediate aftermath of the vote, and in response to the heavy focus on immigration in the preceding debate, there will be strong pressure on the government to support a 'clean break’ interpretation of the electorate’s mandate. On this model, the UK will introduce controls on inward migration from the EU, repatriate the market regulations currently held at EU level and move swiftly towards the negotiation of trading arrangements based on the UK's existing national membership in the World Trade Organization.

If the economic costs of such a policy prove to be as substantial as most forecasters are currently predicting, however, political leaders may come under increasing pressure to support a new ‘special relationship’ option, more akin to the arrangement that Norway has with the EU, but amended to account for the UK’s scale and importance. 

Under such an arrangement, the UK would retain privileged access to EU markets, in return for which it would have to accept continuing freedom of movement and a substantial budgetary contribution. 

Many supporters of the Leave campaign are likely to fiercely resist such an option. But the likely reality of a steep post-vote recession – and the prospect of spending cuts and/or tax rises – will focus the minds of a parliamentary majority that will, in any case, be hard to persuade of the merits of the more radical exit options. Economic recession is also likely to reduce level of immigration, which may help create more room for movement on the charged issue of freedom of movement.

The overarching principle of the ‘special relationship’ option is that the UK would seek to maintain a strong institutionalised partnership with the EU, in which it would exercise more national control over some selected areas than it currently does as a member, but in which it would also preserve the advantages of multilateral co-operation where appropriate. The UK, on this model, would aspire to be the EU’s best friend. 

Other European leaders will have made their own assessments as to whether they would prefer the UK to make a clean break or move towards a new form of close co-operation. They are likely to face strong domestic pressure, especially from business sectors, to reach a deal that avoids sharp increases in the costs of trading with the UK. 

Yet European political leaders will be wary of giving the UK too easy a ride, lest it provide a precedent which their eurosceptic political opponents at home might find attractive. If the UK’s exit is too smooth, it may encourage right-wing nationalist parties in Sweden, Denmark, the Netherlands and – perhaps most worryingly – France to press for comparable treatment. 

A painful post-vote recession could help – increasing the pressure on the UK to accept difficult concessions, while also inflicting enough pain to discourage others who might be tempted to follow the UK's path. 

Building a New Special Relationship 

A new co-operative bargain, between the UK and the EU, could be very important in creating the conditions for sealing a deal on a post-vote economic agreement. Many other EU member states are worried that a UK exit could further weaken Europe’s capability for external action. If ways can be found to maintain and develop the UK's role as a key partner in European diplomacy and security, this could help oil the wheels of a wider deal on trade, migration and regulation. 

Several steps might be included in a new post-exit co-operative bargain.

First, the UK would have to make clear that its strategic objective is to create a new special relationship with the EU, not to use the UK exit as the first step towards a wider disintegration of the Union. The UK should demonstrate that it is not seeking to export its own model, that it will work with others to actively deter further exits, and that it will resist the temptation to make bilateral deals in areas where the EU has primary responsibility. 

Second, the UK should seek ways of continuing to participate in inter-governmental aspects of the EU’s Common Foreign and Security Policy. This will not be easy for either the EU or the UK to accept. But London's absence from key discussions – for example in relation to the application of sanctions or the response to new crises in the Middle East – would weaken the EU's ability to make a difference on international issues that have a direct impact on European security. If the UK were prepared to make such a proposal, therefore, it could gain strong support from other key allies, many of whom are acutely conscious of the risks involved in upsetting the equilibrium created by joint German/British/French leadership. 

Third, the government should use a new Strategic Defence and Security Review as an opportunity to recast its defence and security strategies in response to the new circumstances which an exit will create. It should make a point of working very closely with key European partners, especially France and Germany, in doing so. It is unrealistic to expect that the defence budget can be entirely exempted from the expenditure cuts that will probably be needed in a post-exit spending review. With the limited resources that are available, the government should make clear that its strategic priorities will be focused on areas of common interest with the UK's European allies, rather than on more global roles. 

Fourth, the UK should consider rethinking the focus of its military activities more strongly towards the security of Europe itself. This could, for example, mean further emphasis on providing capabilities for reinforcing NATO’s eastern flank, as well as a willingness to take a bigger role in the Western Balkans, where the possibility of renewed conflict remains present. 

Fifth, opportunities to demonstrate the UK's commitment to solidarity with its erstwhile EU partners should also be sought. It could, for example, deepen its commitment to military missions within the framework of the Common Security and Defence Policy, increase its commitment to hosting refugees from conflict zones and reaffirm its support for both the UN’s 0.7 per cent target for official development assistance and NATO’s target for 2 per cent of GDP to be spent on defence. 

Sixth, the UK should be prepared to continue to make a substantial contribution to the common European funds that are now dedicated to supporting economic development in the EU’s poorest states, now mostly concentrated in Eastern Europe. Without such a commitment, states such as Poland and Romania could face significant cuts in EU financing, which would be unlikely to endear them to supporting UK interests in building a new special relationship. Strong support for EU aid in Europe would also show that the UK is committed to playing a key role in EU efforts to support reform and development in Ukraine, Moldova and Georgia. 

Seventh, the UK should maintain its contributions to EU research and education funds that are designed to support efforts to bring researchers and students together from across Europe. 

Eighth, a major pivot of the Foreign Office's diplomatic effort towards Europe will be required. The UK will no longer have a seat at the European Council, and its subcommittees, as of right. So it will need a strong team of officials in Brussels, drawn from across Whitehall, to argue the UK's case when decisions are being taken that affect its interests. This new requirement will be over and above the new resources that will be needed to provide skills and expertise in trade negotiations. 

Pivoting to Europe

British credibility on the world stage will now depend – as indeed it always has done, to a large extent – on being able to be confident of a stable and secure relationship – economic and political – with its immediate neighbours. Getting that relationship right will be the most important strategic priority for the UK as it faces a future outside the Union.