⏳ Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Missing you already - how Brexit tilts EU political alliances

Published 2020-01-28, 07:04 a/m
Missing you already - how Brexit tilts EU political alliances

By Gabriela Baczynska

BRUSSELS (Reuters) - Britain's exit from the EU is reshaping the balance of power in Europe, removing one of the bloc's two big military powers and one of the top contributors to its budget. Britain has been an outspoken supporter of free trade, close ties with the United States and a tough sanctions policy toward Russia. Here are some issues:

DEFENSE, SECURITY, INTERNATIONAL AFFAIRS

Britain and France, the EU's two nuclear armed U.N. Security Council permanent members, have long been by far the bloc's leading military powers. Britain was also the bloc's only member of the "Five Eyes" intelligence sharing group, giving it privileged access to the output of U.S. spies. To contain the damage from Britain's exit, the bloc is keen to keep London in a tight security and defense relationship in the future.

The departure of a traditional proponent of trans-Atlantic ties will leave more say to Paris, which has greater ambitions for the integration of European defense.

RUSSIA

Britain has been a key backer of sanctions against Russia over Ukraine, with the most important economic ones now in place only until the end of July. Other Russia hawks, including Sweden, Poland and the Baltic states, will see their hand weakened in discussions with peers such as Italy, Hungary and Cyprus that are keen to resume business ties with Moscow.

ECONOMIC LIBERALISM & TRADE

Britain and the EU will find themselves in separate trade talks with the United States and China, which will change the negotiating leverage of the world's most important trade relationships.

Within the EU, the free-traders' lobby will be weakened, leaving the Netherlands at the helm of a group that also includes Ireland, Sweden, Denmark and other smaller states.

With Germany seen leaning more toward a traditional French model of a strong state role, Britain will be an absence in discussions about industrial policy, vetting foreign investment, state aid to industry and creating national champions.

MACRON IN THE DRIVING SEAT

Without Britain, the Franco-German "engine" of the union becomes more important. But as Angela Merkel nears the end of her long tenure as the Germany chancellor, French President Emmanuel Macron could get a bigger say in EU affairs.

Macron wants to reform the EU and deepen its integration, creating a rift with newer eastern EU members such as Poland, which had seen euro-sceptic Britain as an ally.

The eastern members want to compete within the EU through lower prices and reject French proposals to harmonize more rules. They support expanding the bloc into the Balkans, which Macron has resisted, and they strongly back NATO as a bulwark against Russia, while Macron called the alliance "brain dead".

EU BUDGET

The EU is entering a period of horse-trading over its budget for 2021-27 and the departure of Britain leaves a gaping hole. Other net contributors do not want to pay more, while recipients do not want to give up aid.

EURO ZONE

Britain was by far the largest EU state outside the euro zone, meaning the other eight countries that have kept national currencies lose their most important ally when their interests diverge from those of states that use the euro.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.