On June 23, the citizens of the UK take part in a historical referendum whose results could change forever the face of the European Union and could generate unanticipated consequences.
The plebiscite is the platform by which the Brits are to vote “for” or “against” the UK’s stay in the EU. Polls of the last few days show an insignificant advantage in favor of those who are for preserving the membership in the European club (for - 46%, against - 44%).
About 50 million Brits will be able to vote in the referendum, not yet those who have lived abroad for more than 15 years (according to the decision of the UK Supreme Court of this spring). Thus, about 1.2 million Brits who live in Europe are excluded from the voting process even if the results of the plebiscite can affect their welfare, if they are deprived of the status of European citizens.
In the referendum of 1975, which centered on the presence of the UK in the European Economic Community, about 17.3 million Brits (67%) voted “for”, while 8.4 million (32%) – “against”. In the case of Brexit, we speak about at least 4 million Brits who will vote in favor of the exit from the EU, given that they supported the anti-European party UK Independence Party in the European parliamentary elections of May 2014. But the real number of those who oppose the membership in the EU is greater. The results depend a lot on the level of participation in the referendum.
Moldova, even if it’s not part of the EU, will feel the effect of a possible negative vote. The impact could also affect the commercial relations and the situation of the Moldovans who work in the UK as well as political aspects related to the EU’s image in Moldova.
Drastic economic costs
The international financial intuitions (IMF, Word Bank) warned that the possible exist will lead to painful costs for the British economy, which risks shrinking by about 5% until 2019.
The exports to the EU will go through shocks to adapt to the new economic realities when they will no longer benefit from free access to the common European market. This will also affect the producers exporting to Germany, the Netherlands, France and other EU countries to which about 44% (2015) of the UK’s exports of goods and services are oriented. Imports from the UE (about 53% in 2015), which means the interests of particular EU countries (the Netherlands, Germany), will also be affected. The service sector where the UK holds the lead will be the worst hit. Moreover, the UK will have to negotiate from zero or to renegotiate about 125 trade agreements both with the EU and with third countries to which it now exports based on accords arranged by the EU.
As a result of the chain reaction, inflation will grow. About 3.5 million people working in sectors that depend on the EU’s economy could face collateral problems.
The Foreign Direct Investment from the EU, which in 2014 represented about 48% (£496 billion) of the total investments made in the UK, will also be affected.
The prolongation of the negative consequences for the British economy and their ramification will depend on the speed at which London will negotiate a new bilateral framework with Brussels. This mission could be extremely difficult if the EU countries, in particular Germany and France, decide to set higher ‘costs’ for London in an attempt to discourage the exit of other countries to a union that is increasingly hostile to the European project.
‘Inevitable’ political effects
Besides the visible economic implications, the UK’s leaving of the EU will have a series of political consequences.
So, the referendum will encourage the Scots to seek a plebiscite to initiate the separation from London in favor of the stay in the EU. Furthermore, we could see destabilizing trends in Northern Ireland, especially after Ireland will have to introduce strict checks at the border with the UK.
Difficult negotiations on the exit from the EU (initiation of Article 50 of the Treaty of Lisbon) will follow during the next few years. These will perpetuate the negative effects of the referendum on the EU’s image.
The negative vote in the British referendum could have an unfavorable impact on the political spheres of a number of European countries, both from the ‘old’ and ‘new’ Europe (France, Spain, Germany, Austria, Sweden, Finland, Poland, Slovakia, etc.). The anti-European parties from these countries will receive a rich dose of oxygen even if their anti-EU rhetoric is offset by the abundant ‘cold shower’ to which the UK risks being exposed after the procedure for leaving the EU is validated. The Russian propaganda will get new stimuli for continuing the anti-European rhetoric.
Last but not least, the British officials will have to leave the European institutions (European Commission, Council of the EU, European Council, European Parliament etc.) and the UK will initially become a third country. Thus, London will officially stop to influence the decision-making process inside the EU.
It will depend on London if it manages to obtain a status similar to that of Norway, Iceland, and Liechtenstein (European Economic Area) or of Switzerland (individual trade agreement). In any of the mentioned cases, London will have to implement the European acquis and to accept the EU’s conditions in the area of movement of people, as Norway or Switzerland, which do not form part of the EU, do.
Implications for Moldova
The possible impact of the UK referendum was overlooked by the general public in Moldova and by the specialized groups (NGO sector, business community, etc.). That’s why it seems that Brexit is an event that affects the Moldovans not much. In reality, things stand differently.
The authorities tried to make themselves visible amid the British referendum, but in an uninspired way and without discussing statistical data and other important aspects. For example, Prime Minister Pavel Filip called on the Moldovans to motivate their British friends to vote for the UK’s stay in the EU, including the Moldovans with British nationality. This said that the UK’s presence in the EU makes the latter powerful. But Filip’s call is taken out of the Moldovan context, being typical of the European officials or leaders of EU states rather than of an official from a non-EU member state.
As regards foreign trade, the UK is the third destination in the EU for Moldova’s exports (about US$138.2 million in 2015). In case of an exit, the exports to the EU could be hampered as the facilitated access of the Moldovan goods to the British market will stop be to be valid given that the UK will no longer form part of the common European market. The current advantages enjoyed by Moldova (provided in the Association Agreement and DCFTA) will be renewed only if London negotiates an accord with Chisinau. A more positive scenario is possible if the UK joins the European Economic Area, but this process could also be delayed.
The Moldovans working in the UK based on Romanian papers could face particular problems. According to the International Organization for Migration, there are about 20,000 Moldovans in the UK (2012). Most probably, these will have to go to other EU states, as the citizens of other member states (Poland, Bulgaria).
The pro-European feelings of the Moldovans who remained in the country could undergo changes given the anti-European propaganda that is actively disseminated by the Russian media outlets (including Sputnik.md) and the pro-Russian players in Moldova (like the Party of Socialists and the press controlled by these).
Anyway, we must take into account the fact that Moldova is constrained by numerous serious problems (deficiencies in the banking sector, dialogue with the IMF, reform agenda, European integration, etc.). It is evident that these aspects limit the time and Energy for such external subjects as Brexit
Instead of conclusion…
British society was powerfully poisoned by the anti-European rhetoric that ended with the lethal attack on British MP Jo Cox for her pro-European views. That’s why, regardless of the outcome of today’s referendum, the anti-European phobia in the public space must be removed, if post-referendum reconciliation between the two camps is wanted.
The consequences of the referendum must not be neglected, regardless of its results. The post-referendum situation and parameters of the possible damage should be assessed. In this regard, the Moldovan authorities can seek help form non-state players (NGO sector, business community, etc.), British Embassy, EU Delegation, Romania and other foreign partners. The possible unfavorable consequences for Moldova should have been debated long ago. But what counts now is to identify the measures needed to minimize the losses that the Moldovans could sustain because of Brexit.
Dionis Cenușa is a politologist, holding an MA degree in interdisciplinary European studies from the College of Europe.
Areas of interes: European integration, European policies, EU's foreign policy, migration and energy security.
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