Showing posts with label Brexit. Show all posts

Tuesday, December 20, 2016

Stephen Hawkins: This is the most dangerous time for our planet

This is the most dangerous time for our planet

Stephen Hawking

The Guardian, 18 December 2016

We can’t go on ignoring inequality, because we have the means to destroy our world but not to escape it.

As a theoretical physicist based in Cambridge, I have lived my life in an extraordinarily privileged bubble. Cambridge is an unusual town, centred around one of the world’s great universities. Within that town, the scientific community that I became part of in my 20s is even more rarefied.
And within that scientific community, the small group of international theoretical physicists with whom I have spent my working life might sometimes be tempted to regard themselves as the pinnacle. In addition to this, with the celebrity that has come with my books, and the isolation imposed by my illness, I feel as though my ivory tower is getting taller.
So the recent apparent rejection of the elites in both America and Britain is surely aimed at me, as much as anyone. Whatever we might think about the decision by the British electorate to reject membership of the European Union and by the American public to embrace Donald Trump as their next president, there is no doubt in the minds of commentators that this was a cry of anger by people who felt they had been abandoned by their leaders.
It was, everyone seems to agree, the moment when the forgotten spoke, finding their voices to reject the advice and guidance of experts and the elite everywhere.

What matters now, far more than the victories by Brexit and Trump, is how the elites react

I am no exception to this rule. I warned before the Brexit vote that it would damage scientific research in Britain, that a vote to leave would be a step backward, and the electorate – or at least a sufficiently significant proportion of it – took no more notice of me than any of the other political leaders, trade unionists, artists, scientists, businessmen and celebrities who all gave the same unheeded advice to the rest of the country.
What matters now, far more than the choices made by these two electorates, is how the elites react. Should we, in turn, reject these votes as outpourings of crude populism that fail to take account of the facts, and attempt to circumvent or circumscribe the choices that they represent? I would argue that this would be a terrible mistake.
The concerns underlying these votes about the economic consequences of globalisation and accelerating technological change are absolutely understandable. The automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.
This in turn will accelerate the already widening economic inequality around the world. The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people. This is inevitable, it is progress, but it is also socially destructive.
We need to put this alongside the financial crash, which brought home to people that a very few individuals working in the financial sector can accrue huge rewards and that the rest of us underwrite that success and pick up the bill when their greed leads us astray. So taken together we are living in a world of widening, not diminishing, financial inequality, in which many people can see not just their standard of living, but their ability to earn a living at all, disappearing. It is no wonder then that they are searching for a new deal, which Trump and Brexit might have appeared to represent.
It is also the case that another unintended consequence of the global spread of the internet and social media is that the stark nature of these inequalities is far more apparent than it has been in the past. For me, the ability to use technology to communicate has been a liberating and positive experience. Without it, I would not have been able to continue working these many years past.
But it also means that the lives of the richest people in the most prosperous parts of the world are agonisingly visible to anyone, however poor, who has access to a phone. And since there are now more people with a telephone than access to clean water in sub-Saharan Africa, this will shortly mean nearly everyone on our increasingly crowded planet will not be able to escape the inequality.
The consequences of this are plain to see: the rural poor flock to cities, to shanty towns, driven by hope. And then often, finding that the Instagram nirvana is not available there, they seek it overseas, joining the ever greater numbers of economic migrants in search of a better life. These migrants in turn place new demands on the infrastructures and economies of the countries in which they arrive, undermining tolerance and further fuelling political populism.

For me, the really concerning aspect of this is that now, more than at any time in our history, our species needs to work together. We face awesome environmental challenges: climate change, food production, overpopulation, the decimation of other species, epidemic disease, acidification of the oceans.
Together, they are a reminder that we are at the most dangerous moment in the development of humanity. We now have the technology to destroy the planet on which we live, but have not yet developed the ability to escape it. Perhaps in a few hundred years, we will have established human colonies amid the stars, but right now we only have one planet, and we need to work together to protect it.
To do that, we need to break down, not build up, barriers within and between nations. If we are to stand a chance of doing that, the world’s leaders need to acknowledge that they have failed and are failing the many. With resources increasingly concentrated in the hands of a few, we are going to have to learn to share far more than at present.
With not only jobs but entire industries disappearing, we must help people to retrain for a new world and support them financially while they do so. If communities and economies cannot cope with current levels of migration, we must do more to encourage global development, as that is the only way that the migratory millions will be persuaded to seek their future at home.
We can do this, I am an enormous optimist for my species; but it will require the elites, from London to Harvard, from Cambridge to Hollywood, to learn the lessons of the past year. To learn above all a measure of humility.

Wednesday, July 13, 2016

Europe and the JCPOA

EUROPE AND THE JCPOA

By Olivier Decottignies

PolicyWatch 2655
July 13, 2016

Read this article on our website.

July 14 will mark one year since the signing of the Joint Comprehensive Plan of Action (JCPOA), the nuclear agreement with Iran. This article is part of a series of PolicyWatches assessing how the deal has affected various U.S. interests.
For all the skin that Europe has put in the nuclear game with Tehran, the first anniversary of the JCPOA is unlikely to get much attention there. Shaken by Brexit and concerns over a possible banking crisis in Italy -- potentially a much more serious blow to their single currency than the Greek sovereign debt crisis -- Europeans are focused on internal issues, including the future of the EU bloc itself. As for external threats, the main European debate revolves around Moscow's renewed assertiveness, not Tehran's nuclear program (e.g., in the final communique of the recent NATO Summit in Warsaw, Russia is mentioned fifty-nine times, Iran only three). And when it comes to the Middle East, the chief European concern remains the Islamic State and the shock waves -- namely terrorism and refugees -- that the Syrian crisis is sending to the continent, which are shaking the foundations of the EU as a political project.

That said, the nuclear negotiations have been a major, defining endeavor of European diplomacy. Talks with Iran were initiated as far back as 2002 by the so-called E3: Britain, France, and Germany (later, the group was enlarged to include the United States, Russia, and China, forming the P5+1). And in summer 2012, after seven years of stalemate, an unprecedented row of European financial and oil sanctions helped bring Iran back to the negotiating table.

Institutionally, the talks gave breadth and visibility to the EU's high representative for foreign affairs and security policy, a position inaugurated in 2009 and successively filled by Catherine Ashton and Frederica Mogherini. In addition, the P5+1 format fostered the advent of a more prominent German diplomatic role in Europe and beyond, on par with Berlin's economic clout. Ironically, the nuclear negotiations with Iran might also be remembered as one of Britain's last contributions to the EU's common foreign policy.

But unlike in the United States and Iran, where the negotiations became increasingly politicized as they moved toward conclusion, the European approach remained largely consensual and nonpartisan. France, for instance, pursued the same policy under three successive presidents of different political stripes and diplomatic styles: Jacques Chirac, Nicolas Sarkozy, and Francois Hollande. The respective parliaments of Britain, France, and Germany were kept informed of the progress of the talks, as were their EU partners in Brussels. But unlike in Washington and Tehran, there was no legislative review of the deal post facto (and certainly no white smoke emanating from a supreme authority, as in Iran). The negotiators had full authority to conclude an agreement, and when the JCPOA was signed last July, it was a done deal for Europe.

Continental expectations about the agreement's consequences have remained limited as well. Significantly, most Europeans refer to the JCPOA as the "nuclear agreement" with Iran, not the panacea-sounding "Iran deal," reflecting their persistent concerns about the Islamic Republic's domestic and regional policies (most notably in Syria). Among other actions, the EU kept its human-rights sanctions in place under the JCPOA. The desired outcome was a transactional understanding in which Tehran restrained its nuclear program in exchange for economic relief. The idea that the deal should or could transform the Islamic Republic had little traction with European negotiators. In their view, this was something Russia and China would certainly oppose -- not to mention the Iranians themselves, who engaged in the talks primarily to salvage their economy, but ultimately to safeguard the regime.

Those limited expectations help explain why France, for instance, was particularly vigilant on the agreement's nuclear parameters, since they would be the only tangible deliverables. Europe's view is that the deal has to be judged on its own nuclear merits, and so far, the JCPOA has lived up to those expectations.

One year after the agreement was inked, and six months after Implementation Day, Europe's purpose is to enforce the deal, not reopen it. European authorities remain vigilant toward potential Iranian proliferation activities, as illustrated by the German intelligence community's recent warning about the regime's procurement efforts. In addition, the two European members of the UN Security Council, Britain and France, still have the power to invoke the "snapback" mechanism provided in the JCPOA and reimpose sanctions should Tehran violate the deal.

At the same time, the West must honor its own commitments to Iran. Europeans are concerned that legal, judicial, or regulatory initiatives in the United States could deter international banks and other economic actors from engaging in legitimate transactions with Iran consistent with the JCPOA. In Europe's view, clear and fair rules are needed so that Iran can get the agreed quid pro quo for allowing restrictions and unprecedented monitoring of its nuclear program -- and so that European companies, who bore the blunt of the sacrifices under the sanctions, can pursue business interests in Iran as long as they follow the JCPOA's rules.

Olivier Decottignies is a French diplomat-in-residence at The Washington Institute.

THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY

Friday, July 1, 2016

Brexit's False Democracy

Tuesday, June 28, 2016

Brexit's False Democracy

What the Vote Really Revealed

Kathleen R. McNamara

KATHLEEN R. McNAMARA is a Professor at Georgetown University and the author of The Politics of Everyday Europe: Constructing Authority in the European Union [1].

Referenda are terrible mechanisms of democracy. As a case in point, the recent British referendum over the United Kingdom’s membership in the EU was a reckless gamble [2] that took a very real issue—the need for more open and legitimate contestation in the EU—and turned it into a political grotesquerie of shamelessly opportunistic political elites. The raucous debate over the United Kingdom’s continued membership in the EU was riven with lies and misrepresentations, some of which are now being explicitly rolled back [3]by Brexit advocates; even the British press rues its bombastic support [4] for the Leave side. Unfortunately, many British voters appear not to have known exactly what the EU is [5], validating other recent research demonstrating a lack of factual knowledge [6] about the union.
Observers of the referendum should therefore be wary about drawing conclusions about broader globalization efforts, the Western order, the inevitability of the rise of populist anti-immigration parties, or the viability of the EU project overall. The answer to the breathless question posed in the New York Times on Sunday [7]—“Is the post-1945 order imposed on the world by the United States and its allies unraveling, too?”—is simple. No, it is not. And yet the emotions and cultural chasms brought to bear in the Brexit vote cannot and should not be ignored.
Brexit’s real lesson is that there is a consequential divide between cosmopolitans who view the future with hope and those who have been left behind and have seen their economic situations and ways of life deteriorate. The same story may well play out in the United States and elsewhere, with important electoral effects. But the Brexit story also speaks to the uniqueness of the EU as a new kind of polity with a profound impact on the lives of all within it. History has shown that the development of new political formulations rarely goes smoothly. The divisions between those who can imagine a better life in the new system and those who cannot will likely continue to drive politics [8] in the EU and elsewhere for years to come.

A demonstrator stands outside the Houses of Parliament during a protest aimed at showing London's solidarity with the European Union following the recent EU referendum, in central London, Britain, June 28, 2016.

CLASS CONSCIOUS
Although the Brexit referendum was a highly imperfect form of democratic representation, the emotions [9] voiced by Leave voters were very real. They echo important and valid feelings of other populations across the Western democracies. There are two worlds of people, as analysis of Brexit voting patterns clearly indicated, that are divided in their experiences and their visions of the future. Educational attainment [10], age, and national identity decisively determined the vote [11]. Younger voters of all economic backgrounds and those with a university education voted overwhelmingly in favor of Remain. Older voters, the unemployed, and those with a strong sense of English national identity sought to leave.
The fight over Brexit is a reflection of the social exclusion that arises in a world of stark economic inequality.One way of thinking about the division is to see it as cosmopolitan versus parochial thinking, rooted in deeper social and economic trends that create their own cultural dynamics. Cosmopolitanism, a sense of belonging to a global community beyond one’s immediate borders, requires confidence in one’s place in the world and implies a hope about the future beyond the nation-state. The parochial view is tinged with fear about that future and a sense that societal transformation will leave the common voter behind. In part, that fear reflects the opening of markets, but it is equally due to changes in technology and broader shifts in capitalism away from protection of both the middle and the working classes. These shifts can’t be blamed solely on globalization; they also have much to do with domestic politics and policy decisions. In the United Kingdom and elsewhere, political choices have accelerated deindustrialization while decimating social safety nets and doing little to put the brakes on rising inequality.
Given this harsh reality for the unemployed, the older, and the uneducated, the Remain campaign’s warnings about the economic disaster of Brexit carried little weight; many voters believed that their opportunities were closed off long ago. The clever marketing of the Brexit campaign, including the mantras “Take Back Control” and “Breaking Point,” spoke to very real senses of exclusion but offered few solutions; the reality is that British political dynamics, more than the EU’s rules, have created the United Kingdom’s social and economic problems.
The economic divide and the social effects of it pushed immigration to the forefront of the debate. Voters were right that immigration of both EU nationals and non-EU immigrants has risen tremendously [12], particularly since the financial crisis. Whereas other states within the EU have struggled with immigrants from Syria and Iraq, however, the United Kingdom has had a tiny number of asylum claims [13]. And studies show that immigrants pay far more in taxes than they take out in benefits. Nevertheless, the underlying fears made such facts unimportant. Indeed, the areas with the most foreigners voted overwhelmingly for staying in the EU. They are regions already integrated into a new cosmopolitan world.

A taxi driver holds a Union flag, London, United Kingdom, June 24, 2016.

NEW POWER, NEW PROBLEM
The fight over Brexit is a reflection of the social exclusion that arises in a world of stark economic inequality. But the referendum should also be viewed in terms of a much longer history of political development and state building. The EU is far beyond a simple international organization or trade treaty, since it has accrued significant political authority across a wide range of areas. The rulings of the European Court of Justice, for example, supersede national law, and the laws of the EU have transformed everyday life in Europe, even as the Brussels bureaucracy and its fiscal presence remain tiny.
Historically, new political authorities have emerged and evolved in messy, ugly, and often violent ways. National projects of unification have involved coercion, civil wars, and the brutal exercise of power. Questions of federalism in the United States are still being fought today. Although the nation-state seems universal and natural, there have been many other forms of government in Europe alone: the Hapsburg monarchy, Italian city-states, the Holy Roman Empire, and the Hanseatic League, for example, have all come and gone. The EU, for all its faults, is an innovative new form, a polity in formation. Those under 45, and particularly those under 30, embrace it and see it as a natural and positive thing, a backdrop to their changed everyday lives that creates more opportunities than it closes down.
Given history’s guide, we should not be surprised that the deepening of the EU has created a backlash. But we can be appalled by the craven opportunism and lack of political leadership in the United Kingdom and on the European continent in guiding this development. The EU will only work if all its citizens can imagine themselves part of a cosmopolitan, thriving democratic polity, one that balances local, national, and EU powers and creates economic opportunity. Listening to those on both sides of the cultural divide, and working to ease the economic inequality that underlies the division between the hopeful and the excluded, is the only way forward for the EU—and the rest of us.

Monday, June 27, 2016

Life after Brexit - London Falling

Monday, June 27, 2016

London Falling

Life After Brexit

R. Daniel Kelemen

R. DANIEL KELEMEN is Professor of Political Science and Law at Rutgers University.

In a historic act of self-harm, the British electorate has chosen to leave the European Union. Brexit—as it is called—will do severe damage to the United Kingdom’s economy and its strategic interests. Brexit will also deal a heavy blow to the project of European integration. The EU will survive, but it will never be the same. Leaders of far-right parties across Europe cheered the referendum result, as did Donald Trump. Meanwhile, the United Kingdom’s allies shuddered, and financial markets in the country [1] and across the world plummeted.
With negotiations beginning over the terms of the United Kingdom’s departure, much is uncertain. But one thing is clear already: the Leave campaign’s claim that the EU had robbed the United Kingdom of its sovereignty was false. If nothing else, the vote shows that the country was sovereign all along and that it was free to make disastrous decisions.
A TOXIC CAMPAIGN
The Leave victory marks the culmination of a poisonous debate. Although the Remain campaign was responsible for some distortions of its own—such as claiming that Brexit would make British households 4,300 pounds (over $5,000) worse off per year [2]—the Leave campaign was premised on lies and empty promises. Proponents claimed that EU immigrants were to blame for the strains on Britain’s public services, when in fact they made net contributions to the Exchequer, to the tune of 20 billion pounds (over $27 billion) between 2000 and 2011 [3]. Leave stoked xenophobia, suggesting that the EU was opening the United Kingdom to a flood of refugees and would soon allow millions of Turks to immigrate to Britain. Neither was true. In fact, London had complete control over how many refugees the United Kingdom accepted. Turkey is not “set to join the EU [4]” as the Leave campaign claimed, and in any case, Britain had a veto over Turkish membership.

Electronic boards are seen at the Madrid stock exchange which plummeted after Britain voted to leave the European Union in the EU BREXIT referendum, in Madrid, Spain, June 24, 2016.

Leave leaders also appealed to “Little England’s” worst nationalist instincts—repeatedly comparing the EU with Nazi Germany. The campaign’s only real parallel with Nazism was UKIP leader Nigel Farage’s “Breaking Point [5]” poster, which closely resembled Nazi propaganda picturing a column of refugees.
Of course, the Remain campaign was lackluster. Although Prime Minister David Cameron spoke passionately for continued British membership in the EU, he and his Conservative pro-Remain colleagues lacked credibility after years of scoring cheap points by bashing Brussels. Labour leader Jeremy Corbyn, a long-time eurosceptic, damned the union with faint praise when he declared that he was “seven out of ten” for Remain. Polling in the run-up to the vote revealed that nearly half of Labour supporters were uncertain of their party’s position on the referendum [6].
STUFF EU!
The Remain side lost despite enjoying the backing of labor unions, business leaders, universities, doctors, the governments of all of the United Kingdom’s allies, celebrities ranging from David Beckham to J.K. Rowling, and the leadership of every party aside from UKIP. The Bank of England, the IMF, and an overwhelming majority of economists warned that Brexit would severely damage investment, growth, and jobs in Britain. A majority of voters just didn’t care. Brexiteer Michael Gove was on to something when he said, “I think people in this country have had enough of experts.”
To be sure, the Leave side was fueled by a populist backlash against elites. But the campaign itself was led by consummate members of the Tory party elite such as Etonian former London Mayor Boris Johnson and Lord Chancellor Gove. Also, the anti-establishment mood didn’t seem to guide young voters: large majorities of those under 50 years old voted to stay, while it was those over 50 who pushed the United Kingdom out. Many frustrated young voters will feel that the old—nostalgic for a bygone Britain—have robbed them of a European future.
More than anything, though, the Leave vote was a vote against immigration. The closing days of the campaign revealed more starkly than ever just how central opposition to immigration was to the Leave campaign. Initial polling showed that nearly three-quarters of voters [7] who saw immigration as the most important issue facing Britain favored Brexit, whereas strong majorities of those who saw economic issues as the main concern supported Remain.
The day after the vote, Britons—those who got any sleep—awoke to the sight of Cameron announcing that he will step down as prime minister in time for the Conservative Party conference in October. Although Cameron originally promised to stay on regardless of the result, that position was untenable after he led the losing Remain campaign. Whether or not Boris Johnson replaces Cameron, it is clear that the new leadership will come from the Brexiteer wing of the Conservative Party. And so, Cameron lost the gamble of his life. Having called for a referendum in hopes of staving off UKIP and containing the anti-EU wing of his own party, he will end up handing them control. The Labour Party is in turmoil as well, with Corbyn facing a leadership challenge from his backbenches.

A British flag which was washed away by heavy rains the day before lies on the street in London, Britain, June 24, 2016 after Britain voted to leave the European Union in the EU BREXIT referendum.

But divisions within the Conservatives and Labour are the least of the United Kingdom’s worries now. With the pound plummeting to its lowest value in decades, stock markets around the world tumbling, and Standard & Poor’s planning to strip the United Kingdom of its AAA status, the short-term economic consequences of Brexit are already apparent. The long-term economic and political consequences, although more uncertain, are potentially far more troubling.
Voters also awoke to a disunited Kingdom: the referendum map revealed a sharply divided nation, with Scotland, Northern Ireland, and London voting overwhelmingly for Remain, whereas most of the rest of England went for Leave. Scottish leaders have already declared that they should not be dragged out of the EU against their will by English voters and have called for a second referendum on Scottish independence. In Northern Ireland, too, some Sinn Fein leaders have called for a vote on leaving the United Kingdom to enter a union with the Republic of Ireland.
And as they begin to feel the economic pain of Brexit and contemplate the potential disintegration of the United Kingdom, it may also begin to dawn on Brexit supporters that the Leave campaign sold them a false bill of goods. Even before breakfast the morning after the vote, Farage declared that it had been “a mistake” to claim that the 350 million pounds a week (a widely discredited figure [8]) that the United Kingdom would supposedly save by not paying into the EU budget would be directed to the National Heath Service. Brexit campaigner and Member of the European Parliament Daniel Hannan also clarified for voters that Brexit would not mean an end to EU immigration into Britain; instead, the government would now have control over who comes in and migrants would no longer enjoy the rights of EU citizens. Ultimately, Leave voters who were venting anger over economic insecurity, declining living standards, and recent cuts to public services [9] will discover that structural changes in the economy and Conservative government policies—not the EU or migrants—were at the root of these problems.
IN A BIND?
Legally speaking, the referendum result is not binding. But politically, it would be practically impossible for the new leadership that replaces Cameron to ignore the result. In other words, the United Kingdom will soon set about the process of leaving the EU.
The EU treaties set out clear procedures in Article 50 [10]through which member states may leave. According to the process, the United Kingdom must notify the European Council of its intention to leave the Union, which would then instigate a process of negotiation lasting up to two years—or longer, if all member states agree—to determine the terms of withdrawal. Cameron promised to launch Article 50 immediately after the referendum, but in announcing his resignation, he declared that Article 50 should only be invoked by his successor in the autumn. Some Brexit campaigners have hoped to avoid the procedure altogether (and with it avoid the proviso that the European Parliament must endorse any deal) and to negotiate informally with the European Union. But EU leaders have already stated their position emphatically: the United Kingdom must follow the Article 50 procedure, and start doing so as soon as possible [11].
No one can say for certain what the outcome of the negotiations will be. The Leave campaign was notoriously vague on the issue [12], but there are a few main options—each problematic in its own way. First, if the United Kingdom wants to retain full access to the EU’s single market, it could follow the so-called Norwegian option and opt into the European Economic Area (EEA), which is an existing arrangement linking some neighboring countries to the EU’s single market. Otherwise, the United Kingdom could follow the similar Swiss option, through which it would create a bilateral deal with the EU similar to the EEA arrangement.
But in these models, in exchange for access to the single market, the United Kingdom would have to allow free movement of labor, pay into the EU budget, and follow the EU’s accumulated body of regulations—all things the Leave campaign promised would end with Brexit. In short, the United Kingdom would still be subject to single-market rules, but lose any role in shaping them. If, instead, the United Kingdom chooses to leave the single market entirely, it could trade with the EU like any other country that is a member of the WTO (the so-called WTO option). But in this case, British firms would face tariffs as well as substantial non-tariff barriers to trade. Given that 44 percent of British exports go the European Union’s single market, such an outcome would be damaging indeed.
In negotiating with the United Kingdom, the EU will face contradictory pressures. On the one hand, given the size and importance of the British economy, the EU will want to maintain a vibrant trading relationship. A deep recession in an economically isolated Britain would hurt continental Europe as well. On the other hand, the EU needs to drive a hard bargain with Britain to discourage any other member states from considering withdrawal. The EU must send a strong signal that leaving has costly consequences and demonstrate, as Jean-Claude Juncker put it on the eve of the referendum, that “out is out.”
AFTER BREXIT
In a European Union beset by problems—economic and monetary breakdown, refugees, and democratic backsliding in the east—Brexit is the greatest of them all. Support for the EU is at an all-time low, and the Leave victory has been cheered by far-right leaders, from France’s Marine Le Pen to the Netherlands’ Geert Wilders, who have called for referenda of their own. Still, although concerns about the potential break-up of the EU are understandable, the union will likely hold together.
Brexit will deal a huge blow to the international prestige and self-confidence—whatever is left of it—of the European project. European leaders may heed the populists and the lessons of Brexit by placing more restrictions on access to social benefits for EU migrants. Indeed, there is growing support for such policies across the political spectrum in Germany. If the EU is to regain its standing, its leaders must also get a grip on the refugee crisis and move away from its single-minded promotion of austerity, which has been both self-destructive and deeply unpopular across much of Europe. But ultimately, no other member state is likely to leave the union. For those in the eurozone, exit would simply be too costly. And new members in eastern Europe depend too heavily on EU funding to contemplate exit. Only in Sweden and Denmark is EU exit imaginable, although still unlikely because large majorities in both countries still believe they are better off inside the EU than out [13].
Above all, the union will not disintegrate because—despite all its current troubles—it remains, as German Chancellor Angela Merkel’s chief of staff Peter Altmaier tweeted, “the best thing that happened to us in more than 200 years [14].” If the EU didn’t exist, European leaders would be trying to invent something like it. Certainly, many EU policies and institutions, above all the flawed regimes governing the eurozone and the Schengen zone, are in desperate need of reform (reform that some member governments have been blocking). But for all these faults, the EU has played a key role in promoting peace, prosperity, and democracy across Europe over six decades. Voters are frustrated with the EU, but most are even more frustrated with their national governments. Mainstream political parties across Europe remain deeply committed to the union, and we can expect European leaders to reaffirm that commitment in the days to come.
The United Kingdom has always been a reluctant member state, its marriage to Europe one of convenience, not love. Late to join the European Economic Community, ambivalent from the start, and constantly demanding and securing opt-outs from the euro and the Schengen free-movement zone, the United Kingdom has been drifting away from the union for years. Even as the country held its European partners at arm’s length, those partners have sought to embrace it. Citizens across Europe overwhelmingly supported the United Kingdom remaining in the EU, as did their leaders.
In the waning days of the campaign, Continentals quite literally tried to show the United Kingdom their love with grassroots campaigns such as #HugaBrit that saw Europeans hugging British friends and pleading with them not to go. In the end, though, all the hugs and policy concessions were to no avail.
British politicians—and many voters—have blamed the European Union for their problems for years. Now they will have to find something new to bang on about as they deal with an economic downturn and increasing strains on their own political unity caused by the decision to leave. Soon enough, the British will discover whether they truly prefer life outside the union. Having divorced in haste, they may end up repenting at leisure.

Source URL: https://www.foreignaffairs.com/articles/united-kingdom/2016-06-27/london-falling

Links
[1] https://next.ft.com/content/bec97fc6-3a5a-11e6-a780-b48ed7b6126f%20
[2] http://www.theguardian.com/politics/2016/apr/18/eu-referendum-reality-check-uk-households-worse-off-brexit
[3] https://www.theguardian.com/uk-news/2014/nov/05/eu-migrants-uk-gains-20bn-ucl-study
[4] embed:%20http://www.independent.co.uk/news/uk/politics/eu-referendum-vote-leave-accused-of-fanning-the-flames-of-division-after-publishing-controversial-a7067701.html
[5] http://www.independent.co.uk/news/uk/politics/nigel-farage-brexit-poster-vans-eu-referendum-london-remain-breaking-point-a7085396.html
[6] http://www.independent.co.uk/news/uk/politics/eu-referendum-nearly-half-of-labour-votes-unaware-of-party-s-position-a7057236.html
[7] http://www.nbcnews.com/storyline/brexit-referendum/poll-british-voters-split-brexit-think-eu-exit-vote-will-n594086
[8] http://www.independent.co.uk/news/uk/politics/nearly-half-of-britons-believe-vote-leaves-false-350-million-a-week-to-the-eu-claim-a7085016.html
[9] %20https://www.foreignaffairs.com/articles/united-kingdom/2016-06-21/brexit-backlash
[10] http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/577971/EPRS_BRI(2016)577971_EN.pdf
[11] http://www.theguardian.com/politics/2016/jun/24/europe-plunged-crisis-britain-votes-leave-eu-european-union
[12] http://www.policy-network.net/publications/4995/What-would-out-look-like
[13] http://ec.europa.eu/public_opinion/archives/eb/eb83/eb83_publ_en.pdf
[14] https://twitter.com/peteraltmaier/status/746349113415966720
[15] https://t.co/vMRroWbE4n
[16] https://twitter.com/ianbremmer/status/745389910169812992

Friday, June 24, 2016

The Brexit risk to the Iran deal

Published on June 24th, 2016 | by Guest0

The Brexit Risk to the Iran Deal

by Esfandyar Batmanghelidj
The United Kingdom has voted to leave the European Union in a historic “Brexit” vote. The myriad ramifications of the vote will only be fully understood in the coming years, but it is clear that Brexit is as much about the return of great power politics as it is about affairs in the European sphere. Ian Bremmer has declared Brexit the “the most significant political risk the world has experienced since the Cuban Missile Crisis.” It should be no surprise that the prognosis of the Iran deal, perhaps the most significant diplomatic achievement of this decade, will be impacted by the British decision to leave the EU.
The vote has certainly made a splash in Iran. Hamid Aboutalebi, Rouhani’s deputy chief of staff for political affairs, tweeted that “Brexit is a ‘historic opportunity’ for Iran” that must be taken advantage of. On the other side of Iran’s political aisle, Brigadier General Massoud Jazayeri has praised the Brexit vote, suggesting that it represents a rejection of American policies. Whatever the logic of these statements, political actors in Iran are clearly watching the Brexit fallout with interest.
But Iranians should be wary of seeing Brexit as a benign event. The uncertainty and volatility now gripping Europe may have a significant impact on the implementation of the Iran deal. Just as Iran was working to reenter the community of nations, relying on the central coordination of the European Union, the political and economic capacity for implementation is being diverted and eroded.
Diverted Political Capacity
Although much of the debate around the progress in implementation of the nuclear deal has focused on the US-Iran relationship and the role of the U.S. State Department, the diplomatic framework for the implementation of the Joint Comprehensive Plan of Action (JCPOA) is firmly rooted within the structures of the European Union. Annex IV of JCPOA outlines the creation of a Joint Commission with the mandate to “review and consult to address issues arising from the implementation of sanctions lifting” among other non-proliferation-related responsibilities. Annex IV specifically names High Representative Federica Mogherini as the “Coordinator of the Joint Commission” for implementation of the Iran deal.
Mogherini in turn leads the European External Action Service (EEAS), the diplomatic service of the European Union, which has played the central organizational role in coordinating Iran’s negotiations with the world powers. She was a key figure during the nuclear negotiations and spoke alongside Iranian Foreign Minister Javad Zarif during the announcement that the P5+1 and Iran had reached a historic accord.
Within the EEAS, the Iran file has been held by Helga Schmid, recently promoted to secretary general of the service, in a move to give her more time to focus on the Iran deal. Below Schmid, an expert-level Iran Task Force was established in 2015. The task force, led by Portuguese diplomat Hugo Sobral is composed of seven members and works behind the scenes to iron out a wide range of issues related to implementation. Iran is unique in that it sits above most of the organizational hierarchy of the EEAS. Iran is such a complex issue, and has become so central to EU diplomacy as one of the few success stories of recent years, that the mandate for implementation is handled at the most senior levels.
Whereas EU coordination has been an asset for the Iran deal, it is now a risk. First, the diplomatic fallout of Brexit could monopolize the agenda at EEAS, with the senior leadership diverted from their work on Iran. Second, the greater the seniority of the diplomats, the greater the exposure to Europe’s impending political machinations. David Cameron has announced his resignation, and Francois Hollande and Angela Merkel will likely have to fight to keep their parties in control. The European foreign ministers who are stewarding the Iran deal—Britain’s Hammond, Germany’s Frank-Walter, and France’s Ayrault—are at risk of losing their jobs. Third, Brexit will clearly have an immense and detrimental impact on the political capacity of the EU. Already, surging populist politicians Marie Le Pen in France and Geert Wilders in the Netherlands have called for their own countries to pursue referendums on leaving the union. Whether those votes come to pass, the focus of the political establishment in Europe will turn inward, and the willpower and capacity to lead in the international arena will wane.
Eroded Economic Means
There is no other coordinating body for the Iran deal outside the EU-led framework. The EU’s central role, linking the foreign policy interests of the UK, France, and Germany (the E3 states) enabled JCPOA to emerge from a consensus including the United States, China, and Russia. That consensus was crucial to the promise of sanctions relief, which is the most important aspect of the deal from the Iranian perspective. If Iran does not see an economic boon, the Iran deal is at risk of failing.
Troublingly, Brexit will negatively impact the ability of both the UK and Europe to deliver the economic benefits of the Iran deal. The primary barrier to increased trade and investment has been the hesitation of major banks to engage opportunities in Iran. Banks are concerned about the lingering impact of US sanctions. Iranian Foreign Minister Javad Zarif has leaned on Mogherini and EU leadership to compel the US to provide greater comfort to European banks about doing business with Iran. But they have made only limited progress thus far. Additionally, banks are generally more cautious than before the 2009 financial crisis, and Iran is seen as a high-risk market with only limited near-term upsides. Most financiers and investors were hesitant to put capital into Iran prior to Brexit, and they will be even more hesitant now, slowing the inflow of FDI. As early market activity has shown, Brexit is having a significant downward impact on emerging market assets. Already stumbling, emerging markets like Iran will become a less attractive opportunity if the volatility continues.
The secondary barrier is within the UK itself. Optimists might note that one of the key arguments of the Leave campaign was that freedom from the EU would enable the UK to pursue business opportunities in key emerging markets around the world. Although the focus has been on China and India, Iran would certainly fall into that category.
Indeed, the UK has been trying to drum up trade with Iran for the past two years, but has had little to no success. In 2015, Chancellor Exchequer George Osborne was slated to lead a trade delegation to Iran, but this was cancelled largely due to political concerns from the UK’s regional allies. In May of this year, Sajid Javid, the business secretary, was meant to lead a business delegation only for it to be cancelled as the Brexit debate threw Cameron’s cabinet into disarray. The UK does have a formal “trade envoy” to Iran in Lord Norman Lamont, who has been a supporter of renewed Iran-UK ties for many years as the chairman of the British-Iranian Chamber of Commerce. But Lord Lamont has had limited success mustering British business, and the UK lags far behind France, Germany, and Italy in terms of promised FDI. Iranians find some hope in the fact that Lord Lamont supported Brexit and will thus retain or even gain political influence in the aftermath of the referendum. But faltering political will is not the only challenge facing British business with Iran.
At a structural level, the economic priorities of the UK will change. Although the Leave campaign touted an embrace of new global markets, the initial priority will be to shore up the British economy by ensuring continued access to the European Common Market. This will require that the UK negotiate a free-trade agreement with the EU-27. This process will be extremely complex and lengthy, and as the global law firm Baker & McKenzie notes, “there are concerns that the UK lacks the manpower and expertise required for such negotiations.” Michael Dougan, a professor at the University of Liverpool, has cautioned that, in terms of the push to emerging markets, “Logistically it is difficult to imagine that the UK has the internal diplomatic and civil-service capacity to negotiate more than one or two agreements at a time, let alone sixty or seventy.” A logistical challenge will also face the chief executives of major British and European companies, who will now need to focus their attention on post-Brexit planning. They will have fewer resources to devote to developing opportunities in Iran, especially at the required senior levels. Practically speaking, Iran will not be a priority in the post-Brexit economic agenda.
A Change in Mindset
The Brexit vote took place a little less than a year following the historic announcement of the Iran deal on July 14, 2015. What is perhaps most shocking for those of us who followed the Iran deal, and rejoiced in that announcement, is the different mindset affecting the political and economic landscape today.
When the Iran deal was announced, it seemed a triumphant example of cooperation and vision where the national interests of seven different countries, representing the global community, eventually produced a single robust agreement. In many ways, Brexit is a rejection of the type of politics that brought us the Iran Deal.
This may be the final consequence, with the hardest impact to gauge. A single national referendum has shaken the collective faith in the project of formalizing consensus and cooperation in international relations. Iran is coming back into the community of nations. But with the potential demise of the EU, that community will seem less welcoming and less hopeful.

Esfandyar Batmanghelidj is the founder and organizer of the Europe-Iran Forum, a leading economic conference. He is also a researcher on Iranian political economy and social history. Photo courtesy of speedpropertybuyers.co.uk/ via Flickr