The EU, not the UK, will feel the sting of Brexit

Sometimes the truth is hidden in plain sight. Presently there is a lot of ink being spilled — ironically by many of the same political risk commentariat who were so wrong about the Brexit result in the first place — regarding the peril Britain finds itself in after cutting ties to the EU. In reality, the dangers are primarily the other way around.

For the UK, the metric for post-Brexit success is simple enough to gauge. If, in the course of Boris Johnson’s premiership over the next five years, Britain can nail down free trade agreements with the main Anglosphere countries (the US, Canada, New Zealand, Australia and India), all of which are growing faster than the moribund EU, than all is well. If the Johnson government fails in this challenging task, then Brexit is a disaster. It is as simple as that.

But while, for the British, trade tactics will determine the outcome of their huge Brexit geopolitical gamble, for the EU the problem is both more existential and more intractable.

A thought experiment highlights the real peril Brussels now finds itself in. Imagine that one of the major states of the American union (California, perhaps) decided to go its own way. What would be the reaction in the world’s opinion pages? There would be literally thousands of articles sounding the death knell of the American republic itself. While this is precisely what has just happened to the EU, the present silence about this basic reality is as deafening as it is telling.

The reasons for this have primarily to do with the fact that the vast majority of the Western commentariat have an irrational emotional stake in the EU, almost akin to a religious fervor. Many firmly believe, despite all facts to the contrary, that the EU represents nothing less than the vanguard of a post-modern, post-nationalist nirvana for the world.

Suffice it to say, such haughty Wilsonian obliviousness is not the best way to commence any analysis. These emotional blinders highlight the primary reason the commentariat has been so slow for so long in seeing what is glaringly clear: The EU is undoubtedly in geostrategic decline, representing the past, not the future. But, faced with the analytical imperative of following the facts wherever they lead and altering their cherished beliefs, instead — risibly — much of the political risk world chooses to ignore the most obvious realities, precisely to retain their precious theory.

Practically, in losing the UK, the EU has lost its major financial center, its most vibrant major economy, its best intelligence-gathering locus, and one of only two countries (along with France) that can do full spectrum military operations, from peace keeping to war fighting. The UK’s diplomatic corps is world class and (again only along with France) it almost uniquely retains a global outlook, so different, say, than parochial great regional power Germany.

A Europe that already punches well below its weight in military affairs — alongside the US and UK, only five of the NATO allies met the minimum 2 percent gross domestic product defense spending target in 2019 — just got significantly punier.

A Europe that is economically sclerotic — the euro zone grew by a paltry 1 percent last year, with powerhouse Germany managing only 0.5 percent and pathetic Italy doing even worse — just got significantly less dynamic.

A Europe that is politically divided and far too inward-looking just lost one of its most historically internationalist members; a pivotal force for the EU mattering in global affairs. For example, London long served as a conduit for transatlantic relations, explaining Europe to the US and vice versa. Given the major tremors of the Trump era, this vital role is more necessary than ever. With the advent of Brexit, it is a function that is going vacant at precisely the worst time possible for an EU that cannot begin to understand the Trump revolution.

A Europe that is politically divided and far too inward-looking just lost one of its most historically internationalist members.

Dr. John C. Hulsman

These facts — and they are just that, points that really should not be in doubt — broadly summarize the internal damage Brexit has done to Brussels. Of course, such parlous wounds have significant geopolitical ramifications. While nationalist superpowers China and the US go from strength to strength, with regional powers Russia, India, Turkey and Iran also beginning to flex their muscles, a becalmed EU sits in real danger of being on the global menu, as it is not sitting at the global table. Before Brexit, the EU was militarily weak, economically sclerotic, and politically divided. Losing one of its great regional powers (along with France and Germany) has just made a bad situation infinitely worse.

And, historically, weakness in geopolitics is a bit like blood in the water for a shark. Sensing decline, other great powers attack and divide, as if by instinct. For an EU bereft of the UK — in different ways through different guises — China, Russia and (even) the US are on the march, exploiting the EU’s growing divisions and weakness. Brexit both confirms and amplifies this basic and telling geopolitical peril. For, with the loss of the UK — the California of the European Union — it is hard to think of any way for the EU to come back.

• Dr. John C. Hulsman is the president and managing partner of John C. Hulsman Enterprises, a prominent global political risk consulting firm. He is also senior columnist for City AM, the newspaper of the City of London. He can be contacted via www.chartwellspeakers.com.