IU faculty in Britain and across Europe observe Brexit vote, consider its aftermath

As the world attempts to make sense of Britain’s vote to leave the European Union, many Indiana University faculty had a closer vantage point to see history unfold: in countries that will be most directly affected.

Timothy Hellwig

Timothy Hellwig

Timothy Hellwig, director of the Institute for European Studies and an associate professor of political science at IU Bloomington, is in Brussels, Belgium, where the headquarters of the European Union and the European Commission are located.

“People are shocked here,” Hellwig said. “I was at a Brexit watch party last night. When we heard around 9 p.m. that Nigel Farage of the U.K. Independence Party was predicting a ‘Remain’ win, we were collectively relieved. This made it all the more surprising to wake up this morning to see what transpired.”

Nick Cullather, executive associate dean of the School of Global and International Studies, arrived in England with his family last week. In Manchester and the industrial north of the country, they witnessed strong support for Brexit. But they saw more support for remaining in the EU as they got closer to London.

“Polling had indicated a slight lead for ‘Remain’ until the end,” Cullather said. “People here are shocked, gathering in little crowds around the newsstands. Many are angry enough to buttonhole an American on the tube or the street to vent about how upset they are with the outcome.

Nick Cullather

Nick Cullather

“No one in the ‘Leave’ camp seems jubilant,” he added. “There isn’t a coherent vision for a post-EU Britain. In fact, Boris Johnson, the chief ‘Leave’ campaigner and the presumptive next prime minister, is out of step with the working-class voters who won the referendum.”

What happens next?

Ellie Mafi-Kreft, a clinical assistant professor of business economics in IU’s Kelley School of Business, has been in France during the Brexit campaign. She has been able to share insights observed more closely with MBA students enrolled in her class about the United States in the global economy.

“For the next few months, the world is going to be divided between those who benefit from the Brexit and those who won’t,” she said

Padraic Kenney, chair and professor of the Department of International Studies in IU’s School of Global and International Studies, is in Poland, an EU member country since 2004.

Padraic Kenney

Padraic Kenney

“The pessimistic version is that now there will be a rush for the exits,” Kenney said. “But Britain was always a special, reluctant case in the EU, and the loud calls for further departures will probably not be as popular in other countries.”

More than 17.4 million people in Britain voted in support of the “Leave” campaign, as compared with about 16.1 million people who voted to remain in the European Union. Financial markets worldwide have responded sharply, and many have questioned which other nations might leave the 28-member bloc of countries.

“An optimistic version is that now the rest of the EU will be able to regroup and emerge stronger,” Kenney said. “But this will require some thinking about what it is that unites the countries of the EU. Until recently, EU leaders assumed that they knew what this was.”

Winners and losers

The “Eurosceptics” and the nationalists clearly have altered the picture, according to the IU experts.

Mafi-Kreft believes the Scottish independence movement emerged as a strong winner. “They want their independence from U.K., not from Europe, and given that the majority of the Scottish voted to stay in the EU, a new referendum on Scotland the victory of the pro-independence is more likely,” she said.

Ellie Mafi-Kreft

Ellie Mafi-Kreft

She agrees with many who believe that Johnson, the American-born former mayor of London and currently a member of parliament, likely will become England’s next prime minister. But the vote also could have a political impact in France, where the anti-immigration Front National party could see its image and political potential “reinforced”; as well in the United States, bolstering the campaign of presumptive Republican Party presidential nominee Donald Trump.

“Those who defended the Union in the mist of the Euro crisis and did everything to avoid the Grexit (Greece’s departure from the EU) and then the Brexit are now very fragile,” she said. “Francois Holland in France and Angela Merkel in Germany will have a hard time to renew Europe and regain the people’s trust.”

Kenney said the vote and support for anti-EU parties in so many countries suggests that it might be time for the EU to look within and reconsider how it is viewed by citizens in its member countries.

“A pragmatic EU, without all the lofty ideas but able to actually get things done, should appeal to most people in every EU country,” he said. “If EU leaders try to play by the old rules, they may find their union weakening more and more.”

Observing from this side of the Atlantic, but with a unique perspective, is Lee Feinstein. The dean of the School of International Global and International Studies served as U.S. ambassador to Poland from 2009 to 2012 and advised secretaries of state and defense.

Lee Feinstein

Lee Feinstein

“It has immediate and longer-term economic consequences. But looking at this from the broader perspective, what it means is a setback for the effort that started after World War II to build a Europe whole and free,” Feinstein said. “The worst-case scenario of this dis-union is the return of geopolitics to Europe.

“The fracturing of Europe, the withdrawal from the EU of one its most powerful countries economically and its most militarily capable country, as well as a country that has a permanent seat on the U.N. Security Council, is something that’s not good for the United States,” Feinstein added. “The U.S. is stronger when it works with its allies, and when its allies are united — and the United States has no stronger, more like-minded partners than its European friends.”

Economic consequences of Brexit

Financial markets worldwide took a tumble in response to the news, but Mafi-Kreft sees other economic consequences. U.K.-grown products will become more attractive to the British as tariffs and taxes likely will be reinstated for the European agricultural products. But “it will be a hard hit on French agricultural industry as Britain represents their fifth (largest) export market,” she said.

“London City will lose her status as the premier finance place of the union. The Frankfort stock market should profit from this,” she said. “The ‘financial earthquake’ will touch British banks first, as Barclays lost 30 percent of its stock value this morning and JP Morgan confirms it will relocate jobs out of England.”

U.K. automakers also will take a hit. “Most of the auto production in the U.K. is destined for export. Jaguar-Range Rover (recently bought by the Indian company Tata) estimates a loss of billions of euros on their profit, all due to higher border costs.”

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