From the possibility of GREXIT to the reality of BREXIT, four years that shook the European Union to its foundations
In May 2012 this blog predicted that Greece would leave the 'euro zone'. Four years later Greece remains very much part of the 'European Project' whilst the United Kingdom prepares to trigger 'Article 50' and head for the BREXIT!
This blog was launched in May 2012 and, in those early days. Greece led the daily headlines. The Greeks were looking for their second bailout in two years and the economy was in a mess. Many commentators predicted that Greece would soon leave the 'euro zone', and perhaps the European Union itself. Despite the usual complaints from some Conservative MPs it was assumed that the United Kingdom was very much a long term member of the Union. In January 2013 that assumption was 'turned on its head' when the then Prime Minister, David Cameron, announced his intention to legislate for (in the event of a Conservative majority government) an 'in/out' referendum on whether the UK would remain a member of the European Union. In May 2015 (against all predictions) the General Election produced the first Conservative majority government since April 1992. David Cameron kept his promise and, (following renegotiation of the terms of UK membership of the EU), a referendum was held on 23 June 2016. Against all predictions the electorate voted by 52% to 48% to leave the European Union. Cameron resigned and was replaced by Theresa May and the the new administration is now on course to trigger Article 50 of the Treaty on the Functioning of the European Union (Lisbon Treaty) and thus begin the legal process of the United Kingdom ceasing to be a member of the European Union.
Thus from the possibility of GREXIT (remember this phrase?) we have, in four years, moved to the reality of BREXIT. At the conclusion of this decade the United Kingdom (assuming no delays) would have exited a major international organisation and brought to an end almost fifty years of participation in the so called 'European Project'. Greece appears secure in the 'euro zone' (though the Greek economy is still arguably a 'basket case') and the aim of the remaining twenty seven member states of the European Union is to proceed to 'ever closer union' albeit without the contribution of the United Kingdom. How and why did we get here? This blog post aims to assist the reader in the seismic shifts that have taken place in just over four years.
The original posts
It is worth revisiting what this blog stated back in May 2012. Here are the posts.
Four years on
This blog post looks at where we now are, over four years on, and asks the question why GREXIT failed to materialise whilst BREXIT is now a reality. It will be argued that the European Union was determined to maintain the integrity of the 'euro zone' regardless of the consequences to the Greek economy. The decision by David Cameron, in January 2013, to announce an intention to legislate for an in/out referendum was reckless. Contrary to expert opinion the outcome (a vote to leave) was always a possibility indeed it was likely as ordinary voters (especially outside London, Scotland, and Northern Ireland) had become disaffected with political elites and this had not been recognised. Although notions of national sovereignty and national identity were contributing factors to the vote to 'leave' immigration was by far the key single issue. which determined the outcome.
The GREXIT that never happened
Cast your mind back to mid 2012. All the news was about the impending departure of Greece from the 'euro zone'. The Greeks were negotiating their second bailout and the elections were predicted to bring the far left to power; who were making clear that they were not interested in the draconian terms on offer by the European Union,. the European Central Bank, and the International Monetary Fund ("the troika"). Civil unrest in Athens was a daily occurrence, and most European media outlets openly speculated about the imminent ejection from the 'euro zone' of Greece, possible contagion to countries such as Italy and Spain, and even the very real possibility of Greece leaving the European Union. Some went as far as to speculate about a military coup. The term GREXIT entered the popular lexicon.
The elections of 2012 resulted in New Democracy taking power. This centre right party was supportive of the austerity measures demanded by "the troika" and accepted the tough terms of the second bailout. At this point the immediate crisis was averted and talk of Greece leaving the 'euro zone' or the European Union abated. Early 2014 was to lead to a third bailout and yet more talk of Greece being ejected from the 'euro zone'; however, the real crisis was to come in 2015. Following early elections the far left Syriza led by Alexis Tsipras came to power on a manifesto to renegotiate the terms of the bailout and demand less austerity. This demand to reject austerity was to be reinforced by a referendum in July 2015 in which the Greek electorate voted to reject bailout conditions. Despite this rejection the bailout conditions were eventually accepted and talk of Greece leaving the 'euro zone' has again abated.
Was this a rejection of the democratic will of the people? Even as far back as November 2011 a government, led by George Papandreou of PASOK (centre left party), was effectively forced from office when it tried to call a referendum on the original bailout terms. The Papandreou government was replaced by a technocratic government led by Lucas Papademos. Ben Crum of the Department of Political Science of the University of Amsterdam argued in his paper, "Saving the Euro at the Cost of Democracy", that the present course towards executive federalism could be justified for preventing euro dissolution and recognising the value of national self-government; however, it threatens to come at a democratic price. Judicial Cat takes issue with this analysis. Executive federalism and national self government are two different concepts. The collapse of the Papandreou government in 2011 and the effective ignorance of the referendum of 2015 are two examples of were national self governance has been dismissed in favour of measures (unsupported by the electorate) put in place to protect a supra national currency. And this is exactly why Greece did not leave the 'euro zone' and GREXIT remains but a hypothetical concept. The protection of the 'euro zone' was put above all other outcomes. Greece was never going to be permitted to leave as to do so would mean that the 'elites' had 'failed'. The 'euro' was to be permanent and if one nation could leave then this opens the 'flood gates' and leads to the possibility of more important economies following them. The threat of 'contagion' was too much and had to be averted. Therefore the 'elites' of Europe did everything up to and including ignoring the will of the electorate, and forcing democratically elected governments from power, to protect the so called European project.
Although Judicial Cat believed Greece would leave the 'euro zone' ultimately, with hindsight, it is possible to argue that Greece was never going to be allowed to leave, for fear of the precedent it would set.
The fear of a hypothetical GREXIT led to the 'elites' of Europe ignoring the now very real reality of BREXIT.
Why Cameron granted the referendum
Since the early 1990s the Conservative Party has been divided over the merits of the United Kingdom being a member of the European Union. Arguably disagreements over Europe led to the fall of Margaret Thatcher from power. The government of her successor, John Major, was paralysed by arguments over Europe and especially the ratification of the Treaty on European Union ("TEU") (Maastricht). Central to "TEU" was the introduction of European Union Citizenship and, along with the completion of the single European market, complete freedom of movement for European Union citizens. At this time the European Union (European Community as it then was) consisted of twelve nations. Expansion to fifteen nations occurred in 1995; however, it was the expansion in 2004 and the accession of eight countries from the former eastern block that radically altered the public perception of the European Union, and which would lead twelve years later to the decision of the UK electorate to vote to leave.
David Cameron became Prime Minister in 2010 and had to find a way of containing the discontent of his anti European Union MPs, and the surge of the United Kingdom Independence Party. Public concern over unlimited migration was also becoming an issue with arguments about access to public services, and the alleged driving down of wages in the lower skilled sectors of the economy. To combat these concerns Cameron announced in January 2013 that, in the event that the Conservatives formed a majority government after the scheduled general election of May 2015, a renegotiation of the terms of UK membership of the European Union would take place followed by an in/out referendum by the end of 2017. The May 2015 general election returned the Conservative Party to power with a majority for the first time since April 1992. Cameron now had to make good on his promise.
Renegotiation of a not so impressive nature
Cameron secured next to nothing with his renegotiation. He went into the negotiations looking to curb freedom of movement, access to benefits, and protection from further 'euro zone' integration. What he got was no concessions on freedom of movement, an emergency break on access to benefits that appeared so complicated that many felt that the The Court of Justice of the European Union, or the European Parliament, could block it in any event, and some loosely defined 'protections' for countries outside the 'euro zone'. In summary critics of Cameron were not impressed. Yet, he went into the referendum campaign with all the polls, and most experts predicting that the 'remain' argument would win, and win comfortably. Apart from a 'blip' in early June 2016 the polls consistently favoured 'remain' and on referendum night itself, 23 June 2016, early predictions suggested 'remain' had won by as much as ten percent. On the morning of 24 June 2016 'leave' had won by four percentage points. The United Kingdom was now heading for BREXIT. So why were the pundits wrong and why does the political career of David Cameron now lie in ruins.
Not all 'experts' predicted a win for 'remain'
Denis Macshane, a former Member of Parliament, and Minister for Europe in the Labour government, wrote a book entitled 'BREXIT How Britain Will Leave Europe'. Published in 2015 Macshane argues that 'different tributaries, political, economic, much of the press, cultural, identity, and historical' will come together in 'one power confluence' that will lead to the UK leaving the European Union. Macshane also argues that a growing dissatisfaction with political elites merged with the question of Europe. Crucially Macshane suggested that in order to win the referendum Cameron would need to secure a major concession from the European Union, which would involve some control of entry of EU citizens who seek to live and work in the UK. Macshane was most accurate with his assessment of the arguments. And it is worth noting that Macshane is a well known supporter of the European Union. Simon Tilford of the Centre for European Reform in a web pamphlet entitled 'Britain, immigration and Brexit' (published in December 2015/January 2016) was categorical; namely, if the UK voted to leave the EU it would be because of hostility to immigration. So here were two experts who, it turned out, called it absolutely right.Sovereignty influential, but immigration determined the result
Judicial Cat argues that the pundits got it wrong because they could not see outside of London. Within England & Wales only London (by region) voted to remain part of the European Union. London is not representative of England & Wales. Those voting in the provinces were fed up of uncontrolled migration, their fears that wages were being driven down, and access to public services curtailed. There was a residual discontent that so called 'elites' were not taking such concerns seriously, or were simply dismissive of concerns relating to migration as 'racist'. Arguably there was a desire to teach such 'elites' a lesson and, to this end, the electorate engaged with the catchy phrase employed by the official leave campaign, 'Vote Leave and take back control'. Concerns about national sovereignty were influential but ultimately the 'voter in the street' was less concerned about academic arguments concerning European institutions rather than the very visible presence of perceived uncontrolled migration affecting their everyday lives. Experts such as Macshane and Tilford saw what was coming. Exit the M25 area and the reality was that the electorate was overwhelmingly hostile to the European Union. Scotland and Northern Ireland were special cases in terms of access to European funding (Scotland and Northern Ireland) and the special relationship between Northern Ireland and the Republic of Ireland. The electorate wanted to see an improvement to their own lives and felt the only way to achieve this was to seek a referendum result, which arguably would enable the UK to take control of who had the right to live and work in this country.
Conclusion
This blog has argued that the hypothetical of GREXIT became the reality of BREXIT because so called elites disregarded the concerns of their own citizens. In the case of Greece the clear decision of the electorate to renounce austerity was disregarded in favour of continuing the 'euro zone' and increasing integration further. Governments were replaced and decisions of elections ignored. In the United Kingdom the concerns of the electorate outside London were ignored, ridiculed, and dismissed as 'racist'. In Greece the 'elites' succeeded and got their way. The United Kingdom asserted its sovereignty and the electorate sent a very clear message to the European Union that the electorate could be ignored no more. That is why, four years after Judicial Cat predicted GREXIT, instead we have the reality of BREXIT.
