British voters decided to part ways with European Union, and in doing so, unwittingly triggered a global financial meltdown. Whether the freefall which immediately followed the announcement of the result of the so-called Brexit referendum will be settled in the coming days and weeks is impossible to predict for the moment. But what is certainly possible to predict is that this is the beginning of the end for EU. Because this financial mess will certainly genereate a political fallout, probably leading to the dissolution of the union.
This is because even in the run up to the Brexit vote, Europe was already described as a “sinking Titanic” with no hope of being salvaged ever again.
Let’s look at why that is.
*Ever since the financial crisis in 2008, centrifugal forces have been gaining strength because of the increasingly divisive economic disparities between the Protestant north and Catholic south. Northern Europe, from Germany up, with their high economic productivity and distinctive work ethic, have been pulling ahead in terms of rise in productivity and economic growth while nations of the Catholic south (Spain, Italy, Portugal and, even though they are not Catholic, Greece) have been sticking with their siesta culture regardless of the economic hardships they have to overcome. And hardworking people of the north are tired of subsidizing the more relaxed societies of the south.
*The euro, as a currency unit, is mainly a German project, even though it had the full backing of France at its design and launch phase. Germany is the biggest exporter in Europe and among the top three in the world with China and Japan. Germany exports almost half of its GDP. The euro was designed with two objectives in mind: First to allow Germany to continue to sell to the other European countries with ease, by doing away with foreign exchange controls and bureaucracy, in other words, turn Europe into a single-currency market for mainly German-made goods. The second goal was to challenge the dominance of the US dollar as the international reserve currency by creating a rival, European-backed global trade platform, which, again, would ultimately serve German exporters’ interests. There is now a clear realization that for a monetary union to work properly, there has to be a corresponding fiscal union, which amounts to member countries surrendering their tax levying power to a central authority, which is clearly out of the question.
*The economic hardships just exacerbate the political differences. The increasingly nationalistic/right wing trends in European countries stemming from the economic problems have been deepening over the migrant crisis since last summer. With Germany still boasting the capacity to absorb an immigrant workforce to make up for its rapidly aging population and dwindling reproduction rates, Chancellor Angela Merkel has declared her intention to accept some 800 thousand immigrants from Middle East and North Africa annually, and not to antagonize her own powerbase in her own country, has forced other EU nations to do the same, although not pushing them on the numbers. This has created a lot of hostility within the EU with almost every member country trying to erect border fences and stop immigrants from making their way through their borders.
These are just a few of the fundamental issues pulling the EU apart. In several key countries, like Austria, France, Netherlands, Denmark and Belgium, far right politicians are gaining a lot of ground and they all think EU may have been just a bad idea. After the Brexit vote, far right in Netherlands has already called for a referendum to break from EU just like Britain and there is no reason to think that others will not follow.
But the British electorate by triggering the process for the collapse of the EU may have also paved the way that might lead to the disintegration of the United Kindgom itself: Nationalist Scottish leaders have clearly stated that now they would like to repeat the 2014 referendum on secession from the UK because they want to be part of the EU.
And Northern Ireland will now be looking at the possibility of joining the Irish Republic to remain in the EU even if the EU might be no more several years down the road.