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A new dawn Brexits? our take on the EU referendum result

fractured europe 2

In light of yesterday’s EU referendum results and Britain’s historic vote to leave the European Union, Catherine Fieschi, Counterpoint’s founding Director, answers some questions related to populist revolts and anti-establishment politics, how to interpret them and what they mean for the future of our political systems.

 

Is this a vote for UKIP?

I don’t think so. There is no doubt that UKIP are doing well out of this, but I don’t think they are driving it. UKIP were instrumental in conflating immigration and Europe in public discourse and therefore in the minds of voters, but voters were given an opportunity to vote for UKIP just over a year ago in the general election, and they didn’t do so anywhere as much as predicted. The share of UKIP’s vote increased, but not to a huge extent. So I think what we’re seeing now is UKIP reaping the benefits of a scenario to which they contributed, but of which they are not the primary beneficiaries. They are now riding on the coat-tails of a much broader revolt, rather than the other way around.

Is the result of a purely an anti-immigration vote then?

This is a complicated issue; There is no doubt that the Leave campaign’s emphasis on immigration found resonance in voters everywhere (except for London and Scotland); but anyone tempted to reduce this to a xenophobic or a narrow identity vote would be mistaken.  In a sense it is an anti-immigration vote, but not an anti-immigrant vote. It’s about a system that is perceived as failing.

So is this simply an emotional reaction?

More than anything, this is a vote of dismay, perhaps even of despair, at the lack of economic protection afforded ordinary people in the context of accelerated globalisation, and their sense of vulnerability as a result.   Mass immigration is perceived as contributing to this vulnerability, it serves as a proxy for economic fear. But it is the establishment that has failed to protect them that is the target.

Is support for Trump a version of this? Are they the same kinds of voters?

Absolutely. If you look at who supports Trump and who voted to Leave you find roughly the same people: Middle-aged and older, with lower levels of education (which is something we at Counterpoint documented several years ago across Europe), individuals in precarious professional situations who see globalisation as having undermined their job security and who are much less confident in the future and in their ability to do well from global changes.  Geographically, it’s also quite clear that Trump supporters and Brexit supporters come from places whose economic stability has been undermined, if not wrecked, by global trade. This is the political expression of the left-behind. In the UK, in particular, it is an indictment of ravages of austerity policies and cuts since 2008. It’s not enough to say ‘Well, London’s doing fine’.

If economic fear is behind this, why didn’t the voters heed the economic warnings from the Remain camp?

Because what is clear is that a majority of the people don’t trust anyone to be able to protect them. Not any of the mainstream parties, and not the EU. We’re not quite sure who this leaves to do the job, because this doesn’t look like an endorsement of any of the politicians who led the Leave camp. But what is clear is that it is a signal that experts, members of the elite, large businesses – none of the usual suspects is perceived as being able to help. This is why this result is so devastating: it is a clear vote of rejection, but no one is quite sure what it endorses, if anything.

So what happens now? Can whoever comes in in the UK deliver the goods?

This is the painful irony here: what we’re seeing all across our developed economies is the beginning, or acceleration, of massive dislocation as a result of the digitization of the economy and of job-markets; Profound transformations that require new forms of protection, new forms of regulation, a creative approach to economic and financial management. Europe could have delivered this. What is for sure is that those who have voted to exit Europe on the basis of real resentment and fear will get an even worse deal from the kind of deregulation free-for-all that is about to be unleashed.

But it is populism right?

Yes, no doubt about it. This is about a massive rejection of elites and an accusation that this elite has looked out for no one but itself. We’ve written about this before and have always said that the tide would amplify across developed countries. We also said that what was to be feared is the immobilism created by the uncertainty that populism fuels. If today’s hang-over is anything to go by, I would say we haven’t seen such uncertainty in a while. And such deadlock.

Immobilism in the EU or in the UK?

Everywhere! The EU will now try and outline the plan to deal with Brexit over the coming months and this will absorb all of its energies. Germany and France will vie for pole position in the European Union and simultaneously try to placate – at least in the case of France – their growingly Eurosceptic publics; And this may mean being tougher on the UK than Leavers might have thought. The US will be embroiled in an anti-Trump battle. In other words, nowhere will the focus be on what voters have so clearly said that they want: reassurance, protection form the harsher forces of globalisation and a political and financial elite that is connected to the concerns of ordinary voters. Everyone will be focused on keeping the ship afloat, but not on the fundamental changes that are needed. This is also an opportunity for the enemies of Europe.

What of markets?

Markets will see a brief period of extreme volatility. Then they will adjust. But the UK, after a period of rising wages – and possibly average consumer demand – caused by changes in the exchange rates, will face tougher trade barriers and possibly, an extended recession.  The UK’s economic future, and that of its citizens is, to say the least, uncertain (read more here from the CER).  But more to the point the country has just told the world that it cannot be trusted as an international partner. That it does not feel it has the resources to be a member of a slow (we all agree) but open and progressive club; And that, worse, it is willing to break away from its closest allies and turn a deaf ear to their warnings and pleas. The UK is coming across not just as self-destructive (of that there is no doubt), but as destructive to others who trusted it.

It is the political consequences of this vote that are the most worrying. In part because they will disable even able politicians from addressing genuine economic concerns.

Final words?

We need to keep an eye on the possible domino effect this will set in motion. Marine Le Pen has already called for a French referendum on membership to the EU. Others will follow suit: the Netherlands, but perhaps also Denmark, and Italy.  There is no telling where or when the populist tide will turn. And as for Scotland, well this could be the beginning of the great unravelling–of both Unions.

 

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