Brexit opens Pandora's box

Make no mistake about it. Britain's vote to leave the European Union is the most damaging blow ever inflicted on the liberal democratic international order that was created under United States auspices after 1945. Pandora's box is well and truly open.

All Britain's allies and friends, from Australia, Canada, India, Japan and the US to London's 27 EU partners, urged British voters to vote Remain. It is hard to think of anyone beyond Britain's borders who will rejoice at the referendum result outside Moscow, Pyongyang and the hiding places of assorted terrorists.

Britain accounts for about 16 per cent of the EU's economic output, is Europe's pre-eminent financial centre and is a bastion of liberal political and economic principles. Removing it from the EU is like chopping off California from the rest of the US.

A narrow 52 to 48 per cent majority of British voters have ignored the advice of their foreign friends. So it is that the British, it seems, will be the first nation to leave the EU, a club that, in its own eyes, embodies the spirit of peaceful cooperation in a continent ravaged down the centuries by hatred, prejudice and war.


The repercussions will be immense, first and foremost in Britain itself and the rest of Europe, but also around the world. In the EU, practically the only politicians who will toast the British referendum result will be anti-establishment populists, mostly on the extreme right.

Think of Ms Marine Le Pen, leader of France's National Front, or Mr Geert Wilders, leader of the Dutch Freedom party. Each calculates that the British vote will dispirit their domestic rivals and smooth their own paths to greater political influence.

For Ms Le Pen, next year's French presidential election cannot come too quickly. For sure, she is unlikely to win it. Neither is Mr Wilders' demand for a Dutch referendum on EU membership likely to carry the day.

But this is not the point. The point is that demagoguery and hypocrisy in continental Europe have received a boost because Britain, a land with a longer and more honourable tradition of practising and defending freedom than almost any other in the world, has turned its back on the EU.


The demagogues claim to admire British democracy for being brave and solid enough to stage Thursday's referendum on EU membership. In reality, however, the European ultra-rightists despise not just EU values, but also every single British principle of moderation and pluralism that has served the country so well since the 1688-89 Glorious Revolution.

By stimulating populism and contempt for elites, this referendum result will refocus the attention of financial markets on the fragility of the half-built house that is the euro zone. France, Germany and other members of the 19-nation currency area will, of course, stress that their unity and resilience are in no way diminished by the results of the British referendum.

But there remain bitter disagreements on initiatives such as a common deposit insurance scheme to bolster the euro zone's banking union. German Finance Minister Wolfgang Schauble has even said that Mr Mario Draghi, president of the European Central Bank, and his unconventional monetary policies are to blame for the rise in support for the right-wing populist Alternative for Germany party.

Bold new proposals to advance European integration will be off the table at least until after next year's French presidential elections and Germany's parliamentary polls.

For the US, however, Britain's departure from the EU will be an alarm bell - and far from the first to ring in Europe, after the sovereign debt and banking sector crisis, the refugee and migrant emergency and Russia's intervention in Ukraine.

The EU, bereft of Britain, will have its work cut out to avoid giving the impression to US policymakers that it is congenitally disunited and too frail to overcome its own challenges.

Much as the US foreign policy establishment might want to pivot to Asia, the country's next president may well find they have to calm tempests in Europe.

In economic terms, Britain's exit from the EU will mark the disappearance of an ally who, sitting at the European table, has spoken with a strong voice on free markets that usually harmonised with American interests. Without a liberal, internationalist Britain at the table, it becomes difficult to see how the EU will fulfil its stated aim of achieving the comprehensive free trade accord that is under negotiation with the US. Countries such as the Netherlands and Sweden have the same instincts as Britain, but their weight will be seriously reduced without the British at their side.

For Asian countries, too, the referendum result is anything but a cause for celebration. Mr Andrew Small, a scholar at the German Marshall Fund of the US, puts it well: "Every Asian economy has banked on Britain as its gateway to the EU, a phrase echoed publicly and privately by senior officials from all sides."

From Tokyo to Washington and Brussels, the question will be asked, with a mixture of frustration and despair - "What on earth did the British think they were doing?"


A version of this article appeared in the print edition of The Straits Times on June 25, 2016, with the headline 'Brexit opens Pandora's box'. Print Edition | Subscribe