European integration is a process that has been going on since 1951, constantly adding new members and regulating power at the national level of government. In the second wave of accession to the European Union, the UK was initially no more than an agreement of six countries to create an ordinary coal and steel market, modernize and increase production efficiency in these industries, improve working conditions, and solve employment problems in these industries. In addition, the main reason was also the control over the power of each other to maintain peace and exclude possible preparation for war by one of the countries. This approach was maintained for many years, the agreement between the countries developed geographically in breadth and deepened in detail. There was even a legislative body called the European Parliament. However, the history of the European Union did not know such cases when the state ceased to be a member of them until January 2020, when the UK left the EU. This phenomenon has received the characteristic name of Brexit, and its effect and influence have spread to many spheres of society, politics, and economy in Europe.
At the global European level, Brexit symbolically brought three main facts. First, the significant loss in the total population cannot be recovered by the pending candidates. Hence the EU is losing its title of “common home for nearly half a billion consumers” (Butorina, 2020, p. 681). Secondly, the cultural aspect of Europe is unthinkable not only without Great Britain but also without Russia, Norway, Switzerland, Iceland, Ukraine, and many other countries. After Brexit, the European Union will lose hope of creating a collective image of European culture, focusing on itself (Outhwaite, 2017, p. 32). Thirdly, the historical authority of the European Union has fallen, and now an integration into the EU is not the only correct and most attractive goal for any nearby neighboring country. Countries lost confidence in Brussels after the collapse of the socialist system (Butorina, 2020, p. 681). The British exit only confirmed this fact, weakening the EU both politically and economically.
Trade relations with UK-based companies will take on a completely different character. This fact is highly relevant and essential for the European Union since the UK is the third-largest trading partner of the EU after the United States and China (Sampson, 2017, p. 164). In addition, the first iterations of studying the consequences of Brexit confirmed that the complication of trade would entail a decrease in trade income, both from the European Union and from the United Kingdom. Many research groups have been involved in forecasting and building models of sales changes based on quantitative estimates. For example, Sampson’s empirical estimates that consider the impact of trade barriers on foreign direct investment and productivity show that actual costs are more than double the simulated results (2017, p. 174). However, the quantitative indicators of trade between the EU countries and the UK are based, in turn, on qualitative indicators. The trade process is no longer regulated by the preferential terms of European treaties but is a process of foreign trade with all legal and political nuances. Figure 1 shows the GDP of the EU member states, which shows that Britain is far from leading. Nevertheless, the union lost a stable player in the market.
Naturally, the first thing statisticians recorded was a drop in the total GDP and population of the European Union. Along with these leading indicators, the indicators of exports of goods and services, its share in the world market, and RnD spending fell (Butorina, 2020, p. 684). Market fundamentalism reigned in the European Union, which presupposed complete non-interference from the state and self-organization of any market relations. Digitalization has made its changes in the course of market processes; however, liberalism remained a vector for economic development in the European Union. Britain was the leading supporter of such liberal approaches. Therefore, after its departure, the state regulation of market relations in the remaining European countries may change. Strengthening monetary policy began to gain momentum even before the COVID-19 coronavirus pandemic, but it was the dire epidemiological situation that largely contributed to the intervention (Khesin, 2020, p. 75). The nationalization of business partially solved these problems, and the stable growth of enterprises began to be indexed according to the current conditions.
The level of GDP in Britain relative to other countries, especially in Western Europe, is significantly lower. Therefore, in terms of exports, the UK itself lost more than the EU countries. The most significant area is the digital industry, in which the UK has left the rest of Europe far behind (O’Rourke, 2019, p. 268). However, despite this, exports of both sides were lower after Brexit. Further actions led to conflicts in certain branches of business and trade, where special agreements previously bound countries, and now there is room for legal and political maneuvers. For example, the conflict with France has turned into specific fishing threats for Britain (Patel-Carstairs and Culbertson, 2021). These facts reveal two points of view on market fundamentalism.
On the one hand, the regulation of the economy by the state has become a necessary element of the European Union’s policy and almost all countries of the world due to the spread of the coronavirus COVID-19. Thus, the development of such approaches turned out to be relevant at present. The conflicts mentioned above prove that self-regulation is the utopian ideals of autonomous markets inaccessible to democracy, contributing to the voting for Britain’s exit from the EU (Pettifor, 2017, p. 129). However, on the other hand, social factors that are best manifested precisely in the process of self-regulation are the driving force in managerial decisions regarding working conditions, the establishment of trade chains (Outhwaite, 2017, p. 78). Nevertheless, it was correctly noted above that this model relies too much on ideals. The predatory nature of the market has acquired a completely different image from what was initially intended. Moreover, statistics show that the ratio of British exports to exports of the entire EU is quite low, but significant within one country, since only France and Germany have this indicator higher. Figure 2 clearly shows this relationship.
It is also worth noting another factor that influenced the outcome of the vote to leave the European Union. The refugee dominance that has hit Europe since 2015 has somewhat frightened British citizens, who are less geographically accessible to new visitors. To cut off the ability to move freely between EU countries, people not indifferent to this situation voted to leave the EU (Arnorsson and Zoega, 2018, p. 311). This category of people includes those who would be most affected by such an outcome of events. This group includes the elderly, representatives of industry, and education. In addition, cases of racism in the EU countries have become more frequent, which contradicts the current trends in the policy of tolerance in many countries (Virdee and McGeever, 2018, p. 1804). This problem has acquired a rather complex, multi-criteria nature and influenced the outcome of the vote and the economy of Britain and the EU countries.
There is a different point of view on this issue. The researchers argue that the refugees themselves did not influence the outcome of the vote. However, the fault was economic globalization, including a sharp increase in imports from China and a lack of assistance to losers in the market due to these factors (Colantone and Stanig, 2018, p. 201). In addition, austerity policies and ongoing welfare reform measures are also critical to voter sentiment (Fetzer, 2019, p. 3849). However, social reasons dictated the outcome of the vote. The political interests Theresa May faced a conflict at the level of understanding of her policy in the EU and within the state, which was complicated by the territorial situation within the country.
Brexit is not at the heart of all of the EU’s current economic problems. Complicated relations with the United States during the Trump administration, and his vision of the leader of the Russian Federation, Putin, on trade relations with the European Union, only contribute to a developing Euroscepticism, which promotes greater political interference in trade and international economic relations, both inside and outside the EU (Bulmer and Quaglia, 2018, p. 1095). The high availability of referendums and, accordingly, integration reflects the processes of market fundamentalism, the supporters of which are decreasing. State intervention in the economy was necessary due to the pandemic. It is not easy to assess the direct impact of Brexit on the economy due to the existence of a more decisive and more comprehensive factor that does not directly depend on politics and economic relations in the market.
Most researchers agree that further actions of the European Union depend on the activities of two states: France and Germany. Changes in the mechanisms of relations with Britain, including political ones, and relations between these two countries and their impact on other European Union members are the critical factor determining the further development scenario of the European Union. The authors outline three main scenarios for the future for the EU: German hegemony, complete disintegration of the Union, and the acquisition of sovereignty by the rest of the participating countries; or a renewed Franco-German relationship as an engine for the EU. The result will depend partly on strengthening Germany’s relative position and France’s ability to reform its economy (Krotz and Schild, 2018, para. 58). However, the EU’s integration still depends on many factors. Both Britain’s policy and the foreign and domestic policies of countries closely linked economically with the European Union – China and the United States – play a role.
In 2016, Britain allowed itself to say that the money sent to the European Union every year could be used to benefit the national health service. Such political statements had little to do with the actual state of affairs, as the high conceptualization of costs did not consider other criteria established and documented in the financial relations between Britain and the EU. Many benefits and discounts received by the UK were not taken into account, and this point was especially emphasized in his election campaign by Donald Trump (Rose, 2017, p. 556). Britain’s proximity to the United States was crucial in joining the European Union, but it also played a role later. The British resource can no longer be used in the foreign policy of the European Union, which attached a particular importance in building international relations with the United States. Now the security policy and structure of relations will be developed in parallel from the EU in Britain and will focus on improving agreements with countries linked to the UK by strategic interests. Among such countries are India, the Middle East, and such a serious player in the international market as China (Butorina, 2020, p. 685). In turn, the EU will focus on countries that, although they were in former colonial relations with Britain after it acceded to the Union, signed certain cooperation agreements. Africa, the Caribbean, and the Pacific will have more freedom in their policy choices for cooperation that is nevertheless still documented in the EU.
A big question is about helping the “poor” countries remain in the EU and have established economic relations with the Union. The international political arena runs the risk of splitting into two camps. The EU’s positions are very dubious in the context of the evolving view of Euroscepticism on the one hand and inevitable losses in exports and the economy of the economy UK itself. The interests of the two parties will also be dictated in building trade relations with similar countries, complicating these countries’ policies and the policy of the powers interested in foreign trade. Britain has mapped out a plan to create a great world power, and that plan builds on the foundations of Brexit. However, there are advocates of political differentiation in the context of the European Union. As a rule, these approaches, which are widely methodologically presented in the scientific literature, determine the need for arguments about the consequences of the 2008 crisis and subsequent global economic problems (Leruth, Gänzle and Trondal, 2019, p. 1386). Ideas were put forward for developing countries that are more adapted to this, with a discount that all the EU member states should take part in all critical political decisions. Defense and homeland security policy does not tolerate lengthy and protracted decisions in the face of the ever-growing need to protect states’ critical rights and infrastructures.
However, the differentiation is rather vague due to the lack of experience, especially in developing countries. More often than not, this policy is dictated by the interests of the more developed countries, leaving the poorer countries to choose either to join such approaches or to refuse. The latter outcome entails the destruction of the integrity of the European Union, an increase in the share of fragmentation, which can indirectly lead again to market fundamentalism on a more local scale, which they tried to avoid in the Brexit process. The lack of proper support implied by the original EU integration policy, which on the one hand gives freedom to local democracy, but on the other hand, deprives the countries on the periphery of the EU of the opportunity to make quality decisions. However, the effectiveness of the policy of disintegration and integration can be traced only in the long term because now this policy has both pluses and minuses, which are supported only by theoretical statements and a historical retrospective.
It is worth noting that some countries in sectoral terms are even more integrated into the history of the EU, for example, Norway, than some of the direct members of the Union. Norway is also linked to the EU by agreements, which were once an example of non-supranational integration (Fossum and Graver, 2018, p. 75). The unilateral decision-making procedure by European countries that are members of the EU complicates the bilateral policy of conducting relations with countries on the periphery of Europe, which include Norway and Iceland. More radical forms used by Swedish politics imply managerial sovereignty over politics, which is at odds with the established rules of the European Union, which emphasize that such disintegration is possible only in the event of an economic inability of the country, which cannot be attributed to Sweden (Leruth, Gänzle and Trondal, 2019, p. 1389). Brexit in this context is viewed more precisely as the next stage in developing the policy of disintegration than as a complete rupture of relations with the EU. In any case, the policy of equality of EU membership is rather indirect since many countries on the Union’s periphery are economically dependent on more developed powers (Matthijs, 2017, p. 85). In this regard, such approaches must be recognized in international relations, especially among the participating countries, which may allow building a fairer policy, within which ways of further development may be found.
Institutional and Social Changes
Although political and economic factors and consequences are always considered in the foreground in Brexit cases, this process was dictated by many social reasons. Moreover, it was a consequence of many cultural and social aspects that resulted from the British exit from the EU. Emergence policy in Europe does not prepare for possible consequences but instead deals with immediate system failures (Andreouli, Kaposi and Stenner, 2019, p. 6). Even though many of the reasons for Brexit have been discussed for a long time and by both sides, no preventive measures have been taken for the economy (Carl, Dennison and Evans, 2019, p. 208). It has had negative consequences in terms of the complexity of policymaking in an environment of heightened difficulty. The refugee problem and the worldwide pandemic have further exacerbated an already difficult situation.
Culturally, European identity has suffered even more significant difficulties. Great Britain is a country with a vast cultural heritage, which is studied to this day worldwide. This legacy includes the literary achievements of the English classics and the musical culture that determines the direction of the development of art. The influence of culture is firmly entrenched in the entire European society, and after Brexit, it acquires a political connotation and a new field for conflicts. The possible consequences of the denial of culture can negatively affect value education in education, leading to much more severe political and economic problems for the EU. The influence on the phenomenon of the European culture of Britain is challenging to overestimate since often, even the speakers of the Union use various quotes and allegories with references to English literature (Butorina, 2020, p. 686). Of course, these changes are possible only in the long term, but their impact on other areas of political relations should not be underestimated.
A rather unusual situation arises with the use of English in principle. For many residents of the European Union, he is not native, and such people are the majority. However, the majority of adults in Europe speak English (Bachtler and Begg, 2017, p. 755). The possible process of excluding English as an official language in the European Union may have social consequences that complicate any further EU policy. The inclusion and dissemination of native languages locally in countries contribute to the lack of adaptation of the younger generation to international relations. However, it will cut off possible prospects for foreign policy activity. Any adverse action against the English language will negatively affect the EU integration policy.
Britain’s withdrawal from the European Union significantly reduces the economic and political potential of the participating countries. Moreover, Brexit negatively affects the cultural identity of Europeans, complicating relations with the classical works of art in the UK and the English language, the use of which will now indirectly carry political overtones. Europe has become more fragmented and multicultural, which will directly impact the integration policy underlying the EU.
Moreover, the policy of constant deepening and enlargement was violated for the first time. The EU lost not just one member state but a country with a developed economy, which significantly influenced the political arena and rich history. Differentiation is increasingly common in further development, which calls into question the original traditions of the European Union and contributes to Euroscepticism.
At the same time, Brexit contributed to the creation of a crisis and the need to look for a way out of it. Tremendous forces are now thrown into the search for a different vector of development of the EU policy, which previously remained without due attention. Now the countries that have memberships will be able to consider the development of external relations in the field of trade and economy, which will bring specific benefits and development at the local and all-Union level.
Politically, two rival regimes are emerging in Europe, which no longer has a sharply negative assessment due to their marginality. Competition always promotes development, including the current crisis may turn into a search for a new non-trivial solution to questions that have long been asking for answers. The socio-economic structure of the EU has long required radical changes that can transform not only established and proven integration policies and market fundamentalism but also consider the development of value approaches, using more pragmatic practices focused on the strengths of the participating countries and more optimal use of available resources.
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