First of a two-part series.

Europe’s Retrenchment in the Wake of Brexit

The cynic will often overestimate the forces of inevitability, immobility, and kinetic power. In so doing he will be exposed for his eternal pessimism, while the optimist runs his victory lap. Yet even as the cynic is little more than an idealist who has been burned by reality too many times, he too gets to savor the taste of slaying that which was once thought unbeatable.

The class James Burnham called the “Managers,” those definers and keepers of “norms,” have taken quite the beating these past few years. Today, in February 2020, President Donald J. Trump has not only emerged triumphant from his bare-knuckle brawls with the deep state but is now consolidating power and poised to defeat whichever candidate the Democrats put up to challenge him in the November presidential election. The constellation of forces arrayed against him, ranging from media giants to state security agencies, and including some within his own party, surely should have resulted in his removal from office. 

Yet those of us who watched this soap opera for the past three years couldn’t help but notice mistake after mistake from Burnham’s vaunted Managers. Did we overestimate them? I think it’s safe to say that we did. The rotting edifice of “Trump-Russia collusion” finally collapsed with Robert Mueller’s uninspiring testimony on Capitol Hill, and “Trump-Ukraine quid pro quo” only saw a fatigued and bored nation ignore the Democrats crying “wolf” yet again.

Across the pond, Brexit gave us the same show in parallel to the American drama. 

Former Prime Minister David Cameron called a referendum on Brexit in 2016 to once and for all shut up an anti-EU wing inside of his own party. Instead, it resulted in his removal from power and the exit of the UK from the European Union, dealing a blow to the decades-long juggernaut of globalism. 

There, too, we witnessed a street fight that lasted years, and that pitted all of the elites and their vast array of instruments on one side, against people who according to the elite “shouldn’t matter” and “are probably racist anyway” on the other.

Overconfidence and hubris on the part of ruling elites, insulated from various crises of liberal democracy ranging from the 2008 financial crisis to Merkel’s invitation to the Third World to settle in Europe, has not only halted globalist projects but, in both Germany and Britain, has set them back. Beyond that, they have raised questions pertaining to the legitimacy of these regimes. Brexit in particular questions the legitimacy of the European Union project as a whole.

There are arguments to be made in favor of the liberal interpretation and spirit behind what was once the European Common Market and what is now the European Union. Best among them is that with it we have seen peace between European member states for the longest period in history since Pax Romana, on a continent where conflict between quarrelsome neighbors was the norm. Surely nothing can be better than an extended period of continent-wide peace after two of the most brutal wars mankind has ever seen?

Humans, however, are a fickle lot and quite often memories can be short. The trade-off of national sovereignty and local decision-making for “peace in our time” held strongly as the continent continued to experience both safety and prosperity. The European project was humming along and Europe was even looking to expand its borders all the way to the edge of Mesopotamia as it opened up discussions with Turkey for its accession to the union. The future looked quite sunny for European liberals and federalists and those seeking either to leave the union or scrap it all together were little more than extremist figures on the margins of politics, with irrelevant or tiny constituencies who simply didn’t matter.

Historians will remember 2008 as the first significant breaking point in European history since the fall of the Berlin Wall in 1989. Without going into depth on a subject that we are all too familiar with, suffice it to say that the debt crisis ushered in the first crisis of legitimacy for the European project. Compounding this situation, German Chancellor Angela Merkel, in a fit of misplaced altruism, decided to invite millions of migrants from Asia and Africa into Europe in 2015. This not only upset tens of millions of Europeans but also worked to exacerbate a growing migrant crisis, as it also threatened the security of the continent due to the fact that Islamist radicals were embedded in these masses. Merkel’s folly also served to legitimize traditionally-marginalized political forces ranging from populists to xenophobes. Moreover, it served to give Britons of an anti-European bent all the rhetorical artillery they needed to pull their country out of the EU. 

This is where you, the reader, and I find ourselves at the time of this writing. The United Kingdom has left the European Union, an organization to which it never really belonged (as per Charles De Gaulle, now vindicated), and in which it never placed its heart. What now for the European Union?

The advances of populism in Anglo-America at the expense of globalism have left the EU in a phase of transition, trying to play catch up on the global stage as it sorts itself out internally.

Preliminary Effects of Chopping Off a Limb

The loss of the UK has punched a 12-billion-Euro hole into the European Union’s budget. As a net contributor, Britain’s exit requires first and foremost a rebalancing of EU payments to the have-nots, located in Europe’s south and east. The Frugal Four (Austria, Sweden, Denmark, and Holland), prefer not only to reduce transfer payments but also to shrink the size of the EU administration as a whole. Regardless, France and Germany (which will now contribute a hefty combined 42 percent of the EU’s seven-year long-term budget) will fill in the gap left by the UK’s exit.

More important, the EU Parliament has swung to the right in the wake of Brexit. A recalculated assembly sees not only the center-right EPP gain seats, but also the ID grouping (right-nationalist populists which include Italy’s Salvini-led Lega, France’s National Rally, and Alternative for Germany) at the expense of the social-democratic and Green blocs. 

Where once EU politics were a dull contest between two flavors of integration represented by rotating ruling parties of the center-left and center-right, the continent is now seeing ideological pluralism that can only leave Americans envious. No longer does one hear the refrain that the populists are a temporary phenomenon for example, as they have planted roots both in national governments and in Brussels.

Illustrating this new normal was the recent National Conservatism Conference in Rome. Bringing together leading lights such as Hungary’s Viktor Orbán and France’s Marion Maréchal, the event sought to organize, introduce, and clarify the purposes of those with a different vision of the European Union from the liberal federalists who have long dominated discourse and policy in Brussels, and from those content with the current situation, such as Angela Merkel in Germany. These forces represent all of the energies on the right that were amplified in the wake of the migrant crisis and serve as a systemic challenge to the foundation and direction of the European Union as a whole. (We will discuss this more later.)

Franco-German Axis and Realignment

Brexit not only punches a hole in the EU Budget but it also retires the former power triangle formed by London-Paris-Berlin in which one power would lobby another as leverage against the third in the combination. 

The UK’s departure leaves a Paris-Berlin axis which represents Core EU and reflects the historical desire to stop armed conflict between the Franks and his Germanic Alemannian and Swabian cousins. The Paris-Berlin axis represents much more than this, however. It also represents two competing visions of the European Union going forward. It pits the “everything is fine as is” view emanating from Germany, the country at the center of the EU and the one that has derived the most benefit from the status quo, and Macron’s vision of greater integration of the organization.

Emmanuel Macron, representing France, seeks to speed up integration to allow France to punch above its current weight on the global stage by using the EU as a vehicle. His challenge is to persuade the reticent Germans that their economic interests won’t be harmed and the various populists and nationalists that their sovereignty won’t be further eroded. A Herculean task?

Macron recognized this new balance of power immediately and is already seeking new partners with which to approach Berlin. This led him to visit Warsaw last week, wooing the Poles while upsetting them at the same time. Poland, now beginning to feel the power that comes with its size and strength, is in conflict with Brussels over its efforts to reform its communist-era heavy judiciary, and is in a war of words with Russia over the historical narratives surrounding World War II. Upon arrival, Macron was quick to curry favor with Warsaw by siding with them in their argument with Moscow regarding the Molotov-Ribbentrop Pact yet alienated them in the next breath by insisting that Russia is European and that the current state of affairs whereby the Russians are frozen out can no longer be maintained.

Macron further disturbs the Poles by pushing for an EU defense force and criticizing NATO as “brain dead.” There is a de facto coalition between certain European centrists and some on the center-left, seeking the establishment of said force either to project greater European power on the global stage, or in reaction to Trump’s bull-in-a-china-shop approach to U.S.-EU relations. This French-led push upsets the Germans, who are bogged down by historical baggage and thus refuse to engage in any kind of militarism (and whose elite continue to be firm Atlanticists), and NATO loyalists such as Poland and the Baltic States, who see the U.S.-led organization as their greatest bulwark against perceived Russian ambitions. Suffice it to say that a common EU defense barely can be seen on the horizon and presents significant challenges to its proponents in the near and medium-term future.

Trump’s maverick approach to foreign and economic policy combined with Brexit is creating more internal realignment inside of the EU than just the obvious change of relations between Paris and Berlin. Marion Maréchal called for a Latin Bloc (comprising France, Spain, Portugal, and Italy) to link up with the Visegrád Four (Poland, Czechia, Slovakia, and Hungary), to offset the Paris-Berlin Axis. Alongside these groupings also exists the informal New Hanseatic League (NHL), comprised of the Baltic and Nordic States, the Netherlands, and Ireland. Unlike the actual V4 and the proposed Latin Bloc, the NHL is not a populist grouping but rather more geared towards economic goals, with its main focus on defending free markets against the French-led efforts to push for more protectionism in the European Union.

The rise of China globally as an economic superpower combined with a more assertive United States approach to economic competition has left Europe struggling to compete on the global stage.

Foreign Challenges

EU insiders lament that the biggest loss from Brexit is the loss of access to UK intelligence, which many view as being second-to-none in Europe. This creates an intelligence gap for which Europe has not yet put any measures forward. Overreliance on NATO and the United States has seen Macron’s efforts to rally Europe towards a common defense policy (going as far as to propose dropping national vetoes) gain little currency. France is left going it alone in the Sahel (Mali, Niger, Chad, etc.) against Islamist militants, desperate in its attempts to find allies. In light of the announced U.S. withdrawal from the region, prospects for success are dim.

Libya presents an even-greater challenge for Europe. The own-goal of removing Muammar Gaddafi from power (led by the French and British, with the United States “leading from behind’) set fire to his agreement with Italy’s Silvio Berlusconi which had stopped illegal migration from Africa to Italy dead. A de facto partitioned Libya, with competing groups jockeying for power, saw the migrant floodgates re-opened, leading directly to the EU’s current crisis of legitimacy thanks in large part to the role that migration has played in it. 

But beyond cementing the presence of populists in European politics, the Libyan conflict proceeds without a resolution in sight. Worse, different factions are backed by different western states. This is a failure of EU policy. 

Compounding the situation is the Turkish wild card known as Recep Tayyip Erdoğan, who has intervened on the ground in Libya to bolster Turkey’s energy interests in the Eastern Mediterranean, with the added threat of unleashing a new wave of Syrian refugees into Europe should he not get his way. Much like Iran (which we will discuss with Ukraine in part two of this piece), Libya showcases the impotence of Europe on the global stage.

European Champions

The rise of China globally as an economic superpower combined with a more assertive United States approach to economic competition has left Europe struggling to compete on the global stage. Despite being the world’s largest economy when it comes to trade prior to Brexit, the EU has no major companies that can compete with U.S. behemoths such as Amazon, Google, Microsoft, and Facebook, or with Chinese giants such as Alibaba and Tencent. 

The EU, much like the rest of the world, sees unfair Chinese dumping (in which Chinese companies are given state subsidies) as a competitive advantage that is practically impossible to overcome. This had led to growing calls for protectionism within the EU, especially from France.

At the same time Paris, Berlin, Rome, and Warsaw are pursuing a policy to create “European Champions”—companies that can compete with the American and Chinese monsters on the global stage. Brussels is mired in internal debates about how to reform EU competition law so as to allow for the conditions that might allow these giants to arise. Poland, in particular, sees this as a way to move from being a source of cheap labor for Western European corporations towards climbing the value-added chain in exports. The labyrinth-like Brussels bureaucracy thus far has prevented agreement on reform but the ball is rolling in this direction. The open battles between the United States and China over trade have resulted in Europe being one of the battlefields on which this conflict will be fought, with Huawei’s 5G rollout serving as the best example.

Europeans of all competing EU visions and ideologies now realize that pooling resources and creating said champions is the only way in which Europe can reassert itself economically. Reasserting oneself economically also means that one can then protect one’s own economic, political, and security interests more efficiently rather than ceding core competencies to outside powers and institutions under the control of others.

The advances of populism in Anglo-America at the expense of globalism have left the EU in a phase of transition, trying to play catch up on the global stage as it sorts itself out internally. These challenges are not only seeing competing visions about how to address them but also serve to test the legitimacy of the European Union as a whole. The world is shifting eastward as the Asian Pivot is finally taking place, and Europe has to define its place in this new world.

The second part of this essay will elaborate further on Europe’s economic, security, and foreign policies, and especially with its relations with the United States and Britain.

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About Niccolo Soldo

Niccolo Soldo is a writer, speaker, geopolitical risk consultant, and shepherd roaming the Dinaric Alps, V4 and beyond. Follow him on Twitter @espressosoldo.

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