Post-Brexit Europe and
the Future of Globalization
by José Luis Rodríguez Zapatero
Mr President Sir David Clary,
Fellows of Magdalen College,
Members of the University of Oxford,
Organizers of the Madariaga Series,
It is for me a great pleasure to be here, surrounded by so many distinguished scholars and students, in one of the oldest and most prestigious colleges in Oxford, in one of the most prestigious universities in the world. If Universities are the oldest institutions of our civilization, it's because the study of science and research requires a long-term perspective, a wide-ranging perspective. I will try, now, to address this far-reaching vision, without avoiding the urgencies of our times.
I belong to the first generation of Spaniards that has lived all its adulthood in democracy, in freedom. The dream of my generation was freedom, democracy, Europe... and the Beatles. For me and for millions of Spaniards, Europe and the European Union mean freedom and defending peace. It is a project of living together, a superior stage to Nation-States in the civilization process. You can imagine then, that for me it was very hard to take the news that Brexit had won on the 24th of June. Of course I have a deep respect for the British electorate’s decision but since I am here in a country of liberties, in a centre of thought, let me confess that I don’t understand Brexit. There won’t be any winners and its carrying out will be very difficult. It will be nearly impossible to put into practice.
The EU will not win anything from Brexit either. It will lose one of its main powers. A political, economic and democratic powerhouse that is also a frontrunner in Education and Culture. The United Kingdom is the origin of liberties, of citizens’ rights and the political primacy of Parliament.
The EU will lose the country with the most universal language - for now. I say “for now” because Spanish is becoming more widely spoken, a fact that President Trump wouldn’t appreciate. This wouldn’t surprise me as it’s in line with his particular behaviour. The European Union will also lose the reference country in resisting Fascism in the Second World War. I have always felt honoured to share my European citizenship with Sir Winston Churchill who spoke of the United States of Europe.
It’s crucial to never forget that the longest period of peace in Europe since the Roman Empire has been under the European Union’s flag. This is its greatest asset. Just this fact should drive us all to defend the EU totally. Europe is losing the country of the industrial revolution, the country that championed free trade, openness; the country that promoted, among other countries, the Welfare State…
So our goodbyes will be very sad. This is not an agreed separation; this is a unilateral break up. You must know that the EU loves the UK. It is the unilateral dismembering of a continent that could boast the greatest number of democracies, a fascinating History and globally the greatest amount of social rights for its citizens. The United Kingdom will lose out too. Very extensive academic studies have analysed the economic advantages that the United Kingdom gained by belonging to the European Union.
The report “The growth effects of the EU Membership for the UK: Review of the Evidence” from April 2016, by Nicholas Crafts, summarises the main conclusions of these studies and pinpoints the following:
• Since the UK’s entry in the Common Market, there has been a significant increase in GDP and per capita levels, exceeding the forecasts of those who promoted the UK’s integration to Europe in the 1970s.
• These positive effects on the economy were the result of the increase in trade and in greater competitiveness for the UK’s productivity. The UK joined Europe after a long period of economic protectionism and it produced a positive shock in the economy.
• The economic benefits of belonging to the EU (an increase in GDP by 10%) greatly exceeded the costs of budgetary transfers and of communitarian regulations (with an aggregate cost for GDP of 1.5%).
• Regarding immigration, it isn’t an issue that we can include in the costs section. A large amount of studies conclude that the greater proportion of EU immigrants has in fact increased work productivity in the British economy, not to mention the net fiscal contribution.
But setting aside the economic perspective, the effect of Brexit for the United Kingdom represents a loss of vision and power, the loss of the capacity to be a global reference. I think that to talk of a 'global' UK is a great trap. How can it compete with the EU’s capacity and position on the global stage? The EU’s agreements with Latin America, Asia, with the African Union… give added value to the EU and it will be hard for the UK to achieve a similar position. Even more so since the world interprets Brexit as a protectionist reaction and a withdrawal of the UK.
I still can’t grasp how the UK expects to detach itself from the European rules and regulations. We are looking at thousands of norms that have been incorporated to British regulation over time. With regards to the economy, the environment, fundamental rights, consumer protection... It is very possible that the UK will keep most of these regulations but it is a paradox that it will renounce being part of their elaboration or modification. Bearing in mind the principle “no taxation without representation” we would have to say in this case: “no legislation without participation”.
Well then, the UK seems to have opted to have many European rules and regulations without participating in the process of their creation.
We also have to remember that the negotiation of the financial commitments that the UK has already made to the EU – which represent around 60 billion euros – will be another tough battle. A harsh and uncertain battle, just like the future relationship between the EU and the UK. We can imagine that the EU will adopt a hard-line position in these negotiations. It is totally logical to adopt such an attitude in negotiations when the other party has slammed the door.
In short, if Brexit was a decision motivated by uncertainty and the intensity of globalization, technological change and its social effects, and also by the fear of excessive immigration, what it has done in fact is open a period of gigantic uncertainty for the UK:
- The near impossible separation from all the existing legal links.
- A very hard, long and difficult negotiation.
- An uncertain relationship between the UK and the EU.
- Managing immigration won’t become any easier.
Brexit could become a boomerang. A utopia to tackle all the problems that worry British society. But it also implies great confusion. The challenge, the threat, isn’t Brussels. The challenge, for the UK and for everyone, is a new global and technological order because the sovereignty of the past won’t come back.
It’s very easy to pontificate and to vote for Brexit. It’s much harder to identify the consequences and face up to them. It’s like writing a novel; it’s easy to find a title. But writing the chapters and the narrative is something totally different. As the convinced pro-European that I am, who also admires and esteems the United Kingdom, I think it would be reasonable that the EU give the UK a year to reconsider the decision of leaving the EU. It is a historic decision, and thus it would be desirable that there be some time to revalidate it.
The EU has always been generous: with the enlargements to the South and to the East, with its cohesion policies, with the UK’s own singularity, always bearing in mind the ultimate goal: to integrate European democracies. It must be generous now too in its Asylum policy as a response to the refugees’ crisis produced by the Middle East tragedy. It’s clear that I don’t like Brexit. I remember who was glad when it happened – Trump, Le Pen, Wilders and Alternative for Germany.
Brexit and Trump, seem to represent the amendment to the whole international order that was promoted after the Second World War with the very clear leadership of the United States, the United Kingdom and Europe, based on the ideas of democracy, market economy and openness.
The global order of the United Nations, the IMF, the World Bank, the WTO, the EU, NATO, the G8, the G20 is put into question. There is no doubt that it is an imperfect order, but in its current version, and as a result of the progress made in technology, communications and transport, it is globalization as we know it. More open borders, growth of world trade and of foreign investment, of migratory movements, of tourism.
The global consequences are definitely paradoxical.
1. Between 1990 and 2010, the number of people living in extreme poverty halved.
2. At the same time, the world’s population became richer, better educated and in better health. Let me give you one fact: illiteracy has decreased from 44% to 15% and the gender gap has started to close.
3. Since 2000, developing countries have gone from 33% to 48% of global trade.
4. Between 2000 and 2012, developing countries’ proportion of global output went from 23% to 40%.
Why, then, are we now in a moment of unease? Why are we experiencing these political upsets? How can we explain Trump in the US and Brexit in the UK? The world’s wealth is being redistributed more fairly in this more open world. It is a fair redistribution. But the process, like so many historical changes, has provoked unexpected effects.From 2000 to 2011, average monthly wages increased 25% globally. But in Asia they have increased 100% and in the developed world just 5%. Inequalities in the West have increased but not in the world.
Maybe these factors explain what is happening in Western societies, especially in Europe, who is suffering more due to demographic trends, than the USA who is maintaining its share in world GDP. The impact on employment and wages in the West can be a result of this global rebalancing and also of the technological changes we have seen in the last decades. This trend worsened with the 2008 financial crisis. Although despite all this, the great migratory movements still occur from developing countries towards developed countries.
The future can’t be brought to a halt. Protectionism, closed borders, criminalization of cultures or countries, climate change denial, gender discrimination, or sexism… none of these will dictate our future. We must uphold principles of universal validity. Principles of civilization. Globalization is imperfect, yes, but it is a historic advance. And the following are also historic advancements:
- Open societies
- Societies with rights
- Societies with solidarity
- Societies without discrimination
- Educated societies
We must hope that the European Union, China, Latin America, India, the G20, with the support of the international organizations, will strengthen their commitment to:
- Freedom of trade
- The Sustainable Development Goals
- The Climate Change Agreement
- Defending the Human Rights of immigrants and refugees
- Abolishing extreme poverty and reducing inequalities
Only global commitments will enable us to reach global achievements. If we deny globalization and search for answers by closing borders, by promoting reactionary attitudes, we won’t tackle our uncertainties; they will only be put aside, creating greater and more hurtful uncertainties. We need more international community. Not less. We need more regional unions. We must be aware that our societies are more and more demanding, as a consequence of progress in information. This is why public policies must change.
Let me conclude. The great task is to move forwards decidedly in all areas, in the construction of an international community, the G20, the United Nations, trade exchanges, the participation of companies in the SDOs, adapting to the advances of cognitive technology that will entail great progress but also a risk for inequalities. My prognosis is that the nationalistic reactions will only be spasms and will not stop the globalization process. We need to act politically, to explain, to debate... more than ever. And the nations must react with new domestic policies, not with policies designed against what is foreign or global. New domestic policies with greater investment in education, capacity-building and in technological innovation; giving priority to equal opportunities, anti-discrimination and social cohesion. “America first” or “UK first” can involve – once again, a paradox – the loss of world leadership for the first and international relevance for the second and open up a great opportunity for China.
Nevertheless I hope the EU will see this moment as an opportunity to react and advance towards a more perfect union economically and fiscally speaking, strengthening integration and focusing on higher education and social issues. The elections in France and Germany will start to outline an answer. The European Union must be more confident in its own capacity. More open, more integrating, diverse and united, focused on talent, innovation and social cohesion. A European Union able to take over from the United States as world leader - if the US continues in its own withdrawal.
My greatest desire for the UK is that it won’t stay in a no man’s land or become a political island. I hope it will recover its vision and global role, with its European partners and friends. In the meantime, our wish is that the three hundred thousand Brits who live in Spain will still have access to the same rights and will feel at home with us. A perfect example of European culture.
Because the European culture that we learnt about in college is an enlightened civilization and strives to unite, to bring people together. It has brought to us the liberal and democratic ideas, many of which were born in this same country.
Thank you very much.