The beginning of 2017 doesn’t look good for the European Union. But things are at least becoming clearer. In light of attacks from both the US and the UK, the choice between unity and disintegration is registering for Europeans. This is a good thing. Disintegration would result in accelerated poverty and maybe even war, so unity seems like the easy choice. However, tougher decisions lie ahead as unity will be difficult to protect since the EU is facing its own contradictions. In the last few weeks the EU has had to face two unprecedented attacks. The first is the iconoclastic declaration by an American President that he is expecting more European countries to leave the EU and that it will be a good thing, notwithstanding the risks to worldwide peace. This came along with a direct attack on the role of Germany in Europe. This announcement was preceded by the news that Trump would fast track an exhaustive free-trade agreement with the UK. The second attack came from Theresa May. On 17 January, she announced that the UK will go the route of ‘hard Brexit’. She confirms that UK will carry out fiscal dumping by cutting corporate taxes if it doesn’t get access to the single European market. During the Christmas holidays, news surfaced in the UK media that its Queen favoured Brexit, presumably because it would allow the UK to refocus on the Commonwealth. This illustrates to what extent, even at the highest levels, the English never really wanted the EU… and have kept their colonial mindset. Seccessiontist moves from the UK vindicate Charles de Gaulle who always opposed UK membership on the grounds that the UK would never be enthusiastic members. But it is a shame that after 43 years, the EU had not been better at winning over English and Welsh hearts and minds. Threat to post-war order Donald Trump’s declaration is a direct affront to the very post-war order that the US helped to foster. Despite all her words of friendship with the EU, let’s be clear: Theresa May’s declaration was a message of economic war to her neighbours. On 18 January, the cover of The Times couldn’t have been more explicit: “May to EU: Give Us Fair Deal or You’ll Be Crushed”. The implied threat is that the UK could turn into a tax haven by lowering corporate tax and regulation to lure as many multinationals as possible away from the EU. This threat is credible: London already has many tools to attract high-powered business away from the continent. All of this points to a new direction in the current world disorder: a stronger Anglo-Saxon axis. Of course this axis has always existed: it is the ‘special relationship’. For years new Foreign Secretaries in Britain visited the US before any European countries. But recent developments have only strengthened this relationship. The directions the UK and the US have taken make things much clearer for Europeans in 2017. With an assertive Russia in the East, the risks of an isolationist and erratic America in the West, an ascendant China and the protectionism that would follow the implosion of the EU, disintegration would almost certainly lead to poverty and even war. So naturally, Europeans should choose to stick together. Regarding negotiations with the UK, the choices are easy too, at least on paper. With the EU, the English at least want to have their cake and eat it too. Theresa May’s premise is that the EU is desperate for access to the UK market because the UK is the fifth economic power in the world. But this is partly because France and Italy are so weak. While Sweden, Denmark, the Netherlands and Germany have done so well in international markets, it is baffling to hear that the UK thinks EU membership has held it back. May plainly puts the blame for UK failures on the backs of others. The UK has a number of its own problems holding it back, including the fact that it has no industrial policy. In addition, UK internet, telecom, road and train infrastructure is sub-standard; healthcare is on the point of collapsing; the regions are emptying out to London; many economic sectors are uncompetitive and the ones that are competitive overlap with those in America. The irony is that in the end, the UK’s weaknesses and new direction may well backfire on Brexit voters or at least on the least advantaged – and angriest – in the UK. It is clear that the slightest concession in the name of economic interests would create a precedent that would lead more members to leave the EU. The UK tax-haven threat is only credible if UK-based firms get free access to the single market. If they did not, none would choose to invest in the UK to trade with the EU. And EU companies and countries can work even harder to become innovation hubs that would mitigate any advantage of being based in the UK. It is slightly reassuring that the President of the German Industrial Association recently declared that German industrialists will not lobby their government to make concessions to protect their access to the UK market. But in practice, since European politicians have always bowed to Britain, I am not sure we can count on firmness. Are the populists on to something? But it would be foolish automatically to dismiss the new positions in London and Washington, even if they are both arrogant. They highlight an uncomfortable truth for the European political establishment, and the tough choices that lie ahead for the EU if it wants to survive. The difficult choices are about how we will stick together. What the UK have been saying for a while, without being listened to, is that continuing on the same federalist track will drive the EU into a wall. The EU has been much too casual and naïve in the way its institutions are disconnected from citizens. It suffers from a lack of inspirational leadership.
