The vote that could reshape Europe

2017 polls in Europe may be gauge of anti-EU sentiments emboldened by Brexit outcome

Demonstrators outside the Houses of Parliament in London during a protest to show solidarity with the European Union, just days after Britons voted to leave the EU on June 23.
Demonstrators outside the Houses of Parliament in London during a protest to show solidarity with the European Union, just days after Britons voted to leave the EU on June 23. PHOTO: REUTERS

LONDON • No people were killed, no palaces were stormed, and no leaders fled their country. Nonetheless, this year's British decision to leave the European Union (EU) amounted to a revolution, one that continues and might yet reshape the rest of Europe.

For it highlighted and deepened fault lines that have existed on the continent for decades. And it might yet end up overthrowing the political status quo put in place in Europe at the end of World War II.

Early last year, when British Prime Minister David Cameron first announced his intention to hold a referendum on his country's continued membership of the EU, most political observers in London concluded that the potential advantages outweighed the risks.

All opinion polls suggested that, notwithstanding the various gripes Britons might have had about the EU, the overwhelming majority wanted their country to stay in the union.

And all the established political parties supported continued membership. To ensure nothing could go wrong, Mr Cameron insisted on obtaining concessions from the EU, further reducing Britain's obligations to the union.

Demonstrators outside the Houses of Parliament in London during a protest to show solidarity with the European Union, just days after Britons voted to leave the EU on June 23. PHOTO: REUTERS

But then, everything did go wrong, with monumental consequences for Europe's future.

At its most fundamental level, the British referendum broke a taboo that had prevailed in Europe since 1945, and which decreed that it is imperative to push European integration while avoiding asking nations whether they want European unity in the first place.

In effect, the European project of integration was driven from above, on the implicit assumption that the less the people are consulted, the better.

As ridiculous as it might sound now, this elitist approach made perfect historic sense; leaders had a responsibility to push their people beyond the narrow nationalism that had generated so many wars. This meant pooling natural resources such as coal, steel and electricity, liberalising trade and eliminating border controls, initiatives that might not have been supported by voters at that time.

Overall, the unification effort was made much easier because all European economies were growing fast, so electorates throughout the continent had no need to demand greater consultation.

Those benign conditions have long gone; today, the EU is just as likely to be associated with austerity rather than prosperity, and its bureaucracy is universally detested. But that only strengthened the determination of European political elites to avoid asking their people what they wanted.

European leaders were horrified by Mr Cameron's decision to hold a referendum not because they believed the referendum would be lost, but just because Mr Cameron had the temerity to put the question. For other European governments, asking whether a nation wished to leave the EU was similar to asking the pope if he believed in God; a question that is not only irrelevant, but also silly and rude.

Still, the question was asked, and the answer has already disrupted Europe's history. For the first time since the 1950s, a nation looks set not merely to stop the process of European integration, but to reverse it altogether.

The rest of Europe might claim that the British are a unique case, and that no other EU nation would want to repeat Britain's experience. Perhaps, but that's largely because no other nation will be given the chance to vote in a similar referendum; all the evidence suggests anti- EU sentiments are stronger in France and Italy than in Britain.

The British referendum was also a popular rebellion against many other perceived wisdoms, such as the idea that free trade and globalisation benefits everyone, or that immigration enriches nations. In purely statistical terms, that might be correct.

But for the millions of ordinary Britons, especially those uneducated and outside the country's main cities, globalisation meant only marginalisation. While in the past they had to compete for jobs in a national market of 65 million, the EU forced them to compete in a market of 500 million. Unsurprisingly, they did not like that, nor did they like the inflow of an estimated 3.5 million migrants from other EU nations.

It is still possible that the British rebellion will be confined to the British islands and never spread to the rest of Europe. But with national elections due next year in Germany, France, Italy and the Netherlands, nations accounting for over two-thirds of the EU's economy, few are now prepared to predict the outcome. And in each of these countries, anti-EU populist movements are now in the ascendancy, with all taking their cues from the British example.

Undoubtedly, Britain's divorce from the EU will impoverish the British. But it will also impoverish the rest of Europe. The continent that was always so good at committing collective suicide seems determined to repeat the experience.

The perfect storm

Former prime minister David Cameron (top left) called the referendum, fought for the Remain camp passionately, but lost. Foreign Secretary Boris Johnson's (top, right) decision to jump ship to the Leave camp had a big impact on the vote. Labour leader Jeremy Corbyn (bottom, left) was severely criticised for his feeble efforts to convince voters to stay. Former Ukip leader Nigel Farage (bottom, left) ran a divisive campaign tapping into voters' fears of excessive immigration.

A combination of persuasive Leave personalities and bad Remain strategy led to one of the biggest upsets of 2016. These are four key figures in the Brexit vote.

Britain's good intent produced

Britain's political elite wanted the referendum about the country's continued membership in the European Union (EU) to be a debate about economic choices.

But for most of the ordinary Britons who voted to get out of the EU, the main preoccupation was to regain control over Britain's borders, thereby stopping waves of foreigners coming from other EU countries.

In strictly legal terms, these are not immigrants, for EU citizens have a right to settle and work in all the 28 member-states.


Populist onslaught in Europe likely to fail

"Well done, Britain!" was how an ecstatic Marine Le Pen, leader of the far-right, anti-migrant National Front party in France, reacted when told about British voters' decision to pull out of the European Union (EU).

Her joy is understandable, for Britain's EU referendum outcome is seen by nationalist and populist movements throughout Europe as proof that it is possible to win even if one is branded a racist, even if the entire media and political establishment is against you, and even if economic logic points in a different direction.

In the Netherlands, the Party for Freedom led by Geert Wilders, recently convicted for inciting ethnic discrimination, leads in the polls in the run-up to the country's March general election.


Pollsters left in tatters

Many businesses will be affected by the Brexit vote. But one sector of Britain's economy has already been dealt a grievous blow: the opinion polling firms that were spectacularly wrong in predicting the European Union referendum's outcome.

The fact their error came after the same pollsters also failed to predict the results of the British election last year means that an industry once admired for its clairvoyant qualities is now derided as hopeless in measuring the pulse of the people.

Some problems facing British pollsters are well known from the experience of other countries. It's difficult to predict turnout, which is particularly important when votes are counted nationwide in a referendum, rather than by constituencies, as in parliamentary elections. People are also reluctant to tell pollsters how they are voting if they believe others would regard their choice as odd or unfashionable.


No city beats London as a global finance capital

Britain's economy may only be the world's fifth largest, yet when it comes to financial services, nobody beats London as a global finance capital.

More US dollars are traded in London each day than in the United States itself, while 40 per cent of all the world's derivatives change hands in the British capital.

London's equity market has the highest capitalisation in relation to gross domestic product in the industrialised world and Britain is the world's biggest exporter of financial services; its US$97 billion (S$140.5 billion) yearly surplus in this sector is double that of the US.


Rising risks to Asean from messy Brexit talks

The shock Brexit vote on June 23 has so far generated more uncertainty than actual disruption to the global economic and political environment.

The initial economic shock from the vote globally and for Singapore has been less than feared, but it is still seen as an "unnecessary obstacle" to trade and business should divorce proceedings become messy.

"Brexit is the endgame we haven't seen triggered yet," CIMB economist Song Seng Wun said. "The best-case scenario is a smooth, orderly exit, but there are concerns the EU may try to make it as difficult as possible for the UK because they don't want this to be a precedent for others to exit the EU."


Join ST's Telegram channel here and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on December 20, 2016, with the headline The vote that could reshape Europe. Subscribe