Europe after the British exit: demise or reinvention? Stephen Hoadley analyses the implication of Brexit for Europe and concludes that the European Union will survive intact, but will have to adjust, if not reinvent itself.

• Author: Hoadley, Stephen
• Position: Essay

Not only Brexit but also the rise of anti-EU sentiment throughout Europe have given new life to pessimistic conclusions in books with titles such as Flashpoints: The Emerging Crisis in Europe by George Friedman; Decline and Fall: Europe's Slow Motion Suicide by Bruce Thornton; and After the Fall: The End of the European Dream by Walter Laqueur. The magazine Time has added to the gloom with features such as 'The Incredible Shrinking Europe' (8 March 2010); 'Why Europe Can't Get OIF the Ground' (12 July 2010); 'The Decline and Fall of Europe (and Maybe the West)' (22 August 2011); and 'Europe or Bust' (22 August 2015).

However, with Mark Twain I believe rumours of demise are exaggerated. The European Union can adjust and carry on regardless of when and how Britain ceases to be a member. The economic, legal and security foundations of the union are strong. The political foundations are less so, but are not failing yet, and their cracks can be repaired. But Brexit and the rise of anti-EU parties may oblige the European Union, and also Britain, to 'reinvent itself'. (1)

Dire predictions

Let us start with economics, about which dire predictions have been proffered. The exit could reduce the collective GDP, and Britain's contribution to the EU budget and to the European Central Bank, by more than 10 per cent. However, even after Britain's departure, the remaining European Union of 27 members, added to the European Economic Area (Norway, Iceland, Lichtenstein) and the special arrangements with Switzerland, will still be the world's largest economic entity. (2) It is true that many European countries' trade and investment ties with the United Kingdom are vital, but few analysts are predicting that these will be severed, only re-negotiated. Europe will still enjoy capital from, or routed through, London, and will enjoy access to the UK market, most analysts predict.

It is less certain that British goods and services can enter the EU space as freely as before, but analysts, again, are sanguine that the EU leaders ultimately will allow liberal access after a period of grumbling and hard bargaining. While the pound has fallen markedly, the euro has declined only marginally, and this is further evidence that Europe, still the world's leading economy, has functioned steadily even in a period of finance and currency market turbulence and unprecedented migration and terrorist attacks.

Manifestly, two-way movement of labour and entrepreneurs across the English Channel will have to be re-negotiated, but most analysts think it inconceivable that Europe would exclude Britons or Britain from their economies, despite the rhetoric of the Leave campaigners. Meanwhile, the United States and other trade and investment partners have made it clear that they wish to continue business-as-usual with Europe while at the same time negotiating new agreements with Britain.

Legal foundations

The legal foundations of the European Union will remain unchanged by Brexit, with some exceptions. The treaties of Rome, Brussels, Amsterdam, Maastricht and Lisbon will remain in force throughout the transition period and Britain will continue to be guided by them. On the...