The UK’s surprising decision last week to leave the EU has stirred up confusion as to what will happen to Britain, Europe and the rest of the world in the wake of the Brexit.
We do know the Brexit will likely lead to years of negotiation as the UK works out its new relationship with the EU. In a recent note, Torsten Slok, chief international economist and managing director of Deutsche Bank, suggests three possible broad scenarios for a post-Brexit Europe.
The first scenario Slok lays out involves the EU “muddling through,” which he calls a “default strategy” for the EU.
Slok predicts that the “business as usual” outcome will be the most likely scenario post-Brexit. The EU is known for resisting change — in part because of its bureaucratic nature. Even during the European Council meeting on Tuesday in Brussels, 28 EU leaders spent roughly three hours discussing their own bureaucracy before getting around to talking about the exit of Britain, Washington Post reported, noting that the Brexit itself was at least partly a rejection of EU’s red-tape-filled processes.
The second scenario could involve “dissolution tensions,” with Brexit triggering other countries to leave the EU. Nigel Farage, leader of the far-right UK Independence Party, suggested on the morning of Brexit the Netherlands, Sweden and Denmark might be next to leave the EU. Marine Le Pen, leader of the far-right Front National in France, also suggested her country may be last to leave.
Slok calls the third scenario “integration leap,” laying out a situation where the UK’s exit makes the existing 27 members become stronger. In that scenario, the remaining EU members would work together to ramp up security in the Eurozone and get rid of some of the bureaucracy that has slowed down decision-making. Slok isn’t the first person to suggest the Brexit could strengthen the EU.
On Friday, Estonian President Toomas Hendrik Ilves expressed his hope for cooperation and unity between the remaining EU members, according to The Baltic Times.
“What the decision to leave means for the United Kingdom and the European Union politically and economically cannot be predicted in full yet,” he said. “Personally, I hope that it will have a unifying effect on the EU 27.”