Whether or not London should conduct a second referendum regarding Brexit — is a hotly debated issue in European politics nowadays. The countries whom Brexit is not favoring are demanding for a second referendum. Foreign affairs expert Elmar Brok, Chair of the European Parliament Foreign Affairs Committee, in an interview to a news channel favored a second UK referendum on Brexit and said that if no agreement reaches until 29 March 2019, then there would be a hard Brexit. His views were harshly criticized by UK Independence Party’s (UKIP) Mike Hookem who replied that Brok is a dangerous EU fanatic who wants an EU treasury, an EU army, and only EU political parties.
In this ongoing political stalemate, it’s imperative to understand two things. Firstly, is it really possible to conduct a second referendum before the given deadline of March 2019, if yes, then how? Secondly, what has led Angela Merkel’s closest ally Brok to favour a second referendum?
As far as conducting a second referendum is concerned, according to the UK’s constitution it requires a parliamentary approval and currently there are not enough Members of Parliament (MPs) to favor a second referendum. Time constraint is another factor to go for second referendum. The previous referendum alone took more than seven months and Election Commission’s recent recommendations have made it even more impossible to carry out a second referendum before March 2019 when article 50 of the process is due to expire.
While most European countries are contemplating their future with or without Britian — the real question is what would this mean for Germany — Europe’s largest economy and the country with a greater say in the European affairs?
While on the other hand, it has serious implications for Germany since UK is not just a country leaving the European Union (EU) in fact it is much more than that. UK has a share of 16 percent of its GDP in total to the EU and is the second biggest economy in the bloc. And a member with a permanent seat in the United Nations Security Council. With these all-important factors, UK proved to be a crucial actor in the political and economic arena. Them leaving the union will shake the balance of power and the vacuum left will need to be filled by other important countries and Germany is amongst those. Hence Brexit may cause pressure on Berlin.
82 percent of the German regions will see industry, craft and skilled trades under serious pressure from the loss of Britain
Moreover the issue of Euroscepticism — which is at its peak as right-wing parties are making their way to parliament and some even to the governments. Similarly, Eurozone is steadily recovering but economists like Hans-Werner Sinn, former President of the Institute for Economic Research, still fear about its future keeping in view the history of euro-crisis. The Confederation of British Industry and that of German Industries have also issued warnings with regard to the risks faced by Small and Medium Enterprises (SMEs) that, they are not ready to deal with the consequences of the Brexit. It is pertinent to mention here that at least 99 percent of the German companies are SMEs. A study by European Committee of the Regions suggests that 82 percent of the German regions will see industry, craft and skilled trades under serious pressure from the loss of Britain. In addition, there are two more significant distressing factors for Berlin. It is Germany’s one-sided dependence on exports because between 16 and 17.5 percent of economic output in the manufacturing sector will be affected by Brexit. While the other is, its threat to the on-going EU funded projects as the budget could shrink once London stops its budget contribution upon leaving the EU. These problems need to be surmounted by Germany.
According to a survey conducted by Association of German Chambers of Industry and Commerce in February 2018, German trade with the UK has already started declining significantly and one in every 12 companies is planning to shift its UK investment to other markets. Surveys further revealed that one-third of the companies opined that they will not have adverse impact due to Brexit while more than one-half of companies are still unable to assess the repercussions for themselves.
To cap it all off, the repercussions mentioned above may not surface on the day UK comes out of the bloc, but the aftermath would certainly be felt gradually. It is going to be a lose-lose situation pushing Germany to do more to take the European affairs ahead, being the largest country and having a major representation in the EU parliament. These are the reasons prompting the German leadership to raise the voice for a second plebiscite with a hope of making the best of a bad situation because of the perfect storm ahead.
The writer is a student of International Relations. He tweets @NAliBaloch
Published in Daily Times, August 9th 2018.