The Federalist Threat to Europe
Brexit has led many EU leaders and observers to call for further European integration and centralization of power. But the federalist temptation should be resisted at all costs, for both economic and political reasons.
STOCKHOLM – The world is fundamentally different after the “Brexit” referendum in the United Kingdom. It will be decades before we know the full effect of British voters’ decision to leave the European Union.
One thing we can know for sure, however, is that it is in the EU’s best interest to maintain strong ties with the UK, despite the fact that British voters made their decision unilaterally. Too much is at stake to allow the process to be dominated by petty power games that overshadow or undermine common interests, as happens so often in European politics.
Economically, growth in the EU will undoubtedly benefit from an open trading relationship with Britain. A free-trade agreement that includes financial services will minimize the damage from Brexit for all parties involved, because European firms will still rely on London as the region’s only global financial center. Even if banking services migrate elsewhere in the eurozone, companies like Volvo, Siemens, and Total will still need London if they are to compete with companies like Toyota, GE, and Exxon.