The British referendum on June 23, in which 52 percent of the public voted to exit the Eurozone, remains a very contentious topic throughout the continent. It is easily the most consequential vote in Europe in the 21st century and possibly since the end of World War II.
I cannot believe that the officials in either the United Kingdom or the European Union would allow countries to leave the EU based on a one-time, simple-majority vote. I strongly suggest that such monumental decisions include the hurdles required to pass an amendment to the U.S. Constitution.
I also believe the general opinion that the Brexit vote is perpetually binding and that its results should remain unchallenged is preposterous, given the enormity of the negative fallout. The European Union could enact relatively few changes to obtain a different outcome. Those changes that would likely lead to a different British resolution would be:
¦ Limit the number of immigrants any EU member must admit on an annual basis.
¦ Reduce the red tape the EU has introduced. Since 2010, the EU has introduced more than 3,500 new laws affecting British business, costing some $12 billion per year.
¦ Eliminate the Financial Transaction Tax on equity and bond trades. Britain, given its large financial sector and the strength of its trading activity, suffers disproportionately from this tax.
EU’s tough reaction
The EU’s intent to treat Britain harshly for leaving opens up a Pandora’s Box that could affect the other 27 countries that make up the group.
When I think of the prospective problems facing other EU members, I question the policy of requiring Britain to quickly seek an EU exit and taking steps that will exacerbate an economic recession in Britain.
A British slowdown will harm a number of European countries, leading them to question their own willingness to abide by EU regulations.
For example, a majority of British immigrants come from Hungary and Poland. Hurting Britain will reverberate to these countries, hindering the immigration prospects of both Poles and Hungarians .
And Brexit’s slowing of the European economy will only exacerbate the fragile state of the Italian banking system, in which 17 percent of its bank loans are sour.
Current EU laws require that Italian shareholders and bond holders take a haircut before the Italian government can provide some $50 billion in assistance. The possible widespread bankruptcy of Italian banks would have horrendous consequences not only in Italy but in other European countries.
Dissatisfaction with the EU and sympathy for the Brexit vote have attracted widespread support in France, the Netherlands and Austria, where right-wing parties are interested in pursuing similar referendums.
By any standard, Britain is in a mess. Instead of forming a government of unity like the ones that saw the country through World Wars I and II, the Conservative and Labour parties are without leadership, Scotland has clearly stated its preference for leaving Great Britain and Northern Ireland is showing strong interest in reunification with the Republic of Ireland.
Instead of trying to seek concessions from the EU, why are British politicians insisting that the Brexit vote will stand? At the same time, why are no politicians from EU countries calling for steps that would mollify Great Britain?
For thousands of years, Europe suffered military conflicts. The post-World War II peace is due in part to the political stability provided by the euro zone. A reasonable person would argue that a free trade zone for 28 countries should be an economic goal not so easily abandoned.
