10.2.1 Understanding the Brexit vote

The outcome of the referendum, in which a majority of 51.9 per cent voted to leave the EU, surprised most analysts and commentators, not to mention the principal campaigners for Brexit. The culmination of many factors—historical, sociological, and political—Brexit defies simple, mono-causal explanation (Wincott 2017). During its 47-year membership of the EU, the UK was often described as the ‘awkward partner’ (George 1998). Its failure to join major projects such as the euro and Schengen made the notion that it was a half-hearted, or reluctant, member easy to accept at first glance (Wall 2020). However, the UK was not alone in either of those two aspects. And in other ways, it had been among the most active member states, for instance, in building the single market and in launching the EU’s common defence policy in partnership with France. Overall, the UK seemed to strike a workable balance within the EU for more than four decades (Stephens 2021). Yet, despite a broad elite political consensus in favour of membership, feelings of distance, or separateness, from the EU were evident in the attitudes of much of the UK public. That was exacerbated by the presence in the UK of a number of powerful, anti-EU newspapers.

Despite this, the referendum was far from inevitable—few things in politics are. The short-term political causes of the UK’s referendum were not to be found in public opinion (prior to 2016, rarely more than 10 per cent regarded the EU as a major issue in opinion polls) but, rather, in centre-right and right-wing UK politics. It was a Conservative Prime Minister, David Cameron, who gambled on a referendum to settle an issue of internal party political management. Eurosceptic Conservative members of parliament (MPs) had grown in number, prominence, and ambition since the early 1990s, causing significant difficulty to successive party leaders (D’Ancona 2016). Additional pressure was brought to bear on Cameron by the electoral threat of UKIP (the UK Independence Party), a right-wing populist p. 244↵party whose raison d’etre was to get the UK out of the EU (Ford and Goodwin 2014). UKIP stands as a reminder to other EU member states that vocal eurosceptic political parties need not actually be in government in order to have a significant impact on the political agenda, and that failing to build a positive narrative about membership of the EU can create problems should that membership have to be defended, either via elections or in a referendum.

Cameron adopted a strategy of renegotiating the UK’s membership of the EU before putting the question to the UK public of whether to ‘Leave’ the EU or ‘Remain’ in it. The renegotiation had little impact on the UK public (Curtice 2016). Given the complexity of the issue, it was a remarkably short campaign—further testament to the fact that Cameron was overconfident in hoping to quickly lance the eurosceptic boil within his own party. As a result, the quality of debate during the campaign was poor with misinformation rife. Without an established, positive narrative about the UK’s place in the EU to draw on, the official ‘Remain’ campaign settled on a strategy of emphasizing the economic uncertainty and risks of leaving the EU. Two separate ‘Leave’ campaigns—‘Vote Leave’ (the official campaign) and ‘Leave.EU’—were able to target different groups of voters, thus tapping into overlapping but distinctive eurosceptic narratives. The former campaign portrayed the EU as a distant and undemocratic institution that undermined the UK’s sovereignty, overly regulated and stifled the UK economy, and was continually expanding and soon to include Turkey (despite that being unlikely—see section 9.3.3). The latter campaign focused principally on the issue of the free movement of workers within the EU and immigration to the UK. Both ‘Leave’ campaigns tapped into broader populist and nationalist messaging, and tried to capture a sense of political elites being remote and detached—hence the powerful slogan ‘Vote Leave. Take Back Control’. They also pioneered new social media campaigning techniques, subsequently seen in other countries, which enable different (and often contradictory) targeted messages to be sent to individual voters.

Post-referendum analysis concluded that the ‘Leave’ campaigns resonated more strongly with the public, brought together a broader coalition of voters, and deployed messages that offered ‘a greater sense of certainty about what impact leaving the EU would have on immigration and independence. People were less persuaded by the Remain campaign’s focus on the economic risks’ (Swales 2016: 2). The problem for the ‘Remain’ campaign was that as many as 58 per cent of people did not think that leaving the EU would make much difference at all to their personal economic situation and around 32 per cent did not think it would make much difference to the general economic situation in the UK. People holding such views disproportionately voted to leave—perhaps as many as two-thirds of them (Curtice 2017: 32).

The ‘Leave’ coalition was made up of at least three key groups: ‘affluent eurosceptics, the older working class and a smaller group of economically disadvantaged, anti-immigration voters’ (Swales 2016; see Wincott 2021). It is important to approach claims that a certain ‘type of person’ or a certain ‘type of area’ was responsible for Brexit with caution (Antonucci et al. 2017; Dorling and Tomlinson 2019). p. 245↵National political votes are hard to distill in that way and, typically, a coalition of different groups of people will be responsible for any major political outcome in a democracy. The biggest dividing line was age rather than socio-economic or regional. The Brexit vote is thus interesting in the broader context of euroscepticism, with analysis confirming the importance both of people’s economic expectations about EU membership and their sense of national vs. European identity as key factors shaping attitudes towards the EU (Curtice 2017).¹

10.2.2 Negotiating the UK’s withdrawal from the EU

Brexit was the first time the EU had to manage the so-called Article 50 process—the procedure by which a member state could leave the EU (Lazowski 2012; Huysmans 2019). Article 50 states that any member leaving the Union must notify the European Council of its intention to leave, thereby triggering a two-year period (extendable by unanimous agreement) to negotiate a Withdrawal Agreement that settles ‘divorce’ issues, such as the share of liabilities, transitional arrangements, and the rights of each other’s resident citizens. Article 50 requires this to be done, ‘taking account of the framework for [the] future relationship with the Union’, which was to be set out in a Political Declaration appended to the Withdrawal Agreement.

The process was fraught. The UK government triggered the procedure without having agreed, internally, what the future relationship with the EU should involve. The binary choice between leaving and remaining quickly gave way to a series of complicated questions about the closeness and depth of the future UK-EU relationship, and about how to institutionalize it. A more distant relationship (termed ‘hard Brexit’) would see the UK outside of the single market and the customs union, resembling the sort of relationship the EU has with Canada. A closer relationship (termed ‘soft Brexit’) would see the UK remaining in one or both of the single market and customs union, resembling the relationships the EU has with several of its close geographical neighbours (see section 9.3.1). The trade-off for UK decision-makers was clear: increased autonomy from the EU at greater economic cost on the one hand, or a closer relationship with the EU, following many of the EU’s rules without having a say in the making of those rules, on the other. Similar choices had to be made on issues such as security (access to shared police data bases, Europol, the European Arrest Warrant, etc.), research programmes, agencies (EU chemical agency, medicines agency, etc.), and much else: access and participation might be desirable, but as a non-EU member there would be little UK input into decisions.

The Brexit referendum triggered a period of turmoil in UK politics.² The referendum result had been close and losers’ consent, so vital to legitimizing outcomes in p. 246↵democracies, failed to materialize. The Conservative Party itself was also divided between the ‘hard’ and ‘soft’ Brexiters, which made managing the process of Brexit in the UK Parliament next to impossible. For a year—between December 2018 and December 2019—UK politics was in a state of perpetual crisis as no resolution of Brexit was able to command majority support in the UK Parliament. A campaign for a ‘people’s vote’ on the final Brexit deal was established, arguing that the public should have a final say on whether to proceed, once it could see the actual outcome. Eventually, every opposition party in the UK parliament came around to supporting a new referendum.

A general election in December 2019, which was fought almost entirely on the issue of how to resolve Brexit, broke the deadlock. In that election the Conservative Prime Minister, Boris Johnson, won a comfortable 80-seat majority on just 44 per cent of the vote (thanks to the UK’s non-proportional election system), despite 53 per cent voting for parties demanding a new referendum. The result allowed Johnson to pass the Withdrawal Agreement through Parliament and the UK left the EU on 31 January 2020. The final Withdrawal Agreement stood at the ‘harder’ end of the Brexit spectrum and, alongside the Political Declaration, left much to be resolved. A major problem was the implementation of the Northern Ireland Protocol—a provision attached to the Withdrawal Agreement dealing with the specific context of Northern Ireland (part of the UK) and Ireland (an EU member state) (see section 10.2.3).

The process of negotiating Brexit revealed much about both the UK and the EU. The UK government demonstrated a failure to understand how the EU would approach the negotiations (Figueira and Martill 2020). UK political leaders adopted a hard bargaining approach from the outset, seemingly convinced that the EU would eventually compromise on some of its core principles and offer the UK a bespoke deal that would maintain most of the benefits of EU membership without many of the costs. There was also an assumption that the EU’s own unity would at some point break, and the UK would be able to play a ‘divide and rule’ strategy, negotiating directly with key member states such as Germany and France. Some have attributed this to the UK government being weakly socialized into the EU’s ways of working and the majoritarian, non-consensual UK political culture (Martill and Staiger 2021). Throughout this process, UK leaders struggled to balance the demands of creating political unity at home and negotiating with the EU (Schnapper 2020).

By contrast, the unity in the EU’s position was striking (Cirlig 2020). The EU-27 mandated the Commission to negotiate Brexit and the latter appointed as chief negotiator, Michel Barnier, a former Commissioner, MEP, and French Foreign Minister. The Council laid down (and periodically updated) a negotiating mandate. The EP, whose final approval was necessary for any agreement, set up a steering group, which was kept thoroughly briefed on the progress of negotiations and regularly raised concerns of its own, notably on the rights of EU citizens living in the UK (Bressanelli et al. 2019; Closa 2020). Any attempts by the UK government to enlist support from individual EU countries—a ‘divide and rule’ strategy—behind the back of the negotiator were rebuffed.

10.2.3p. 247 The EU-UK Trade and Cooperation Agreement

Following the UK’s departure, a status quo format applied to the application of EU law and policy in the UK for an 11-month period known as the ‘transition period’, which the Johnson government would not countenance extending, despite the Covid-19 pandemic causing havoc with the negotiations. During those 11 months, negotiations took place on transforming the Political Declaration—a forward-looking and aspirational document that had been agreed between the UK and the EU about the future of their relationship—into a formal treaty, entitled the EU-UK Trade and Cooperation Agreement (TCA). However, the UK government indicated that it did not regard the Political Declaration as binding and refused to negotiate on some elements of it—such as the commitment to establish a framework for cooperation on foreign policy—while weakening other elements. After an intense and fraught period, with disagreements ranging from fishing quotas to the nature of a level playing field for trade, agreement between the two sides was finally reached on Christmas Eve 2020—just a week before the expiry of the transition period. The agreement still left important issues to be decided later.³

The key goal of free trade in goods (but not services) was largely achieved: the TCA provides for tariff-free, quota-free access for UK goods to the EU, on the condition that the UK does not undercut EU standards—for example, on consumer protection, fair competition, the environment, or workers’ rights—in a way that could give UK firms an unfair advantage in the EU market. However, the TCA removes the UK from key elements of European security cooperation—for example, Europol, Eurojust, shared police databases, and the European Arrest Warrant—and also the Erasmus student mobility programme, though it provided for UK participation in EU research programmes including Horizon Europe.

The TCA is divided into four key pillars (see Figure 10.1). First, ‘free, fair and sustainable trade’, covering trade in goods (including customs and regulatory cooperation), with limited links between the two sides on financial services and investment, and commitments to establishing smooth exchanges in digital trade, intellectual property, and public procurement. Second, ‘connectivity, sustainability and shared opportunities’, covering transport, energy, fisheries, social security and broad EU programmes on research and innovation, including Horizon Europe. Third, ‘citizens’ security’, covering law enforcement and judicial cooperation in criminal matters, the protection of fundamental rights (including personal data), data exchange and anti-money laundering. Fourth, the ‘governance framework’, which underpins the treaty, and covers shared values, as well as a new Partnership Council, established by both sides to help manage the treaty and any subsequent implementation issues. The governance framework includes a range of dispute settlement structures including enforcement and sanction mechanisms—largely in the form of tariffs that can be imposed by either side—for proven breaches. The EU has considerable experience in negotiating relationships with geographically close neighbours who p. 248↵are not member states (see section 9.3). The TCA is based on the EU’s model for Association Agreements, defined in Article 217 TFEU as ‘an association involving reciprocal rights and obligations, common action and special procedures’.

Open in new tab

Figure 10.1 The EU-UK Trade and Cooperation Agreement

Source: © European Commission

Within the TCA, a number of key areas remain to be negotiated; accordingly, the TCA contains a number of inbuilt, sector-specific deadlines. It is a dynamic document and is not the final word on the future of the EU-UK relationship—a general review is scheduled for 2025 (Thimont Jack and Rutter 2021). Within the first few months of the TCA’ s operation, rifts between the two sides over seafood exports, fishing access and quotas, customs procedures, and finer points within the trade agreement about rules of origin, tariffs, and quotas, emerged. Many of these issues will be addressed by the newly established Partnership Council as part of the bedding-in process of the new agreement. There are also areas not covered by the TCA. Talks have begun in the area of financial services, which could produce a covenant on some form of UK access to EU financial markets, a particularly salient issue for the UK economy. While the EU may understandably feel reluctant to concede unfettered UK access to EU financial markets, the need to agree the mutual recognition of professional qualifications, and to better facilitate issues such as work-based trips and secondments between the EU and the UK is key. The EU and the UK established a Joint Financial Regulatory Forum in April 2021, which is a significant institutional step in the process of deciding future EU market-access rights for the UK finance industry.

p. 249↵There remain, however, three overarching Brexit tensions likely to produce regular spats between the EU and the UK. The first of these tensions is the Northern Ireland Protocol, which remains one of the most controversial issues of Brexit. The Protocol raises political challenges, with those who strongly support Northern Ireland remaining part of the UK arguing that it separates Northern Ireland from the rest of the UK in trade terms, and calling for its abolition (see Box 10.1). While Northern Ireland remains a part of the UK, it remains economically closely attached to the EU—within both the EU’s customs union and de facto within the single market for goods, which the rest of the UK (Scotland, Wales, and England) have left. The situation entails customs and regulatory checks on goods travelling to Northern Ireland from other parts of the UK. From the EU perspective, it meant conceding that its external economic border would run through the territory of a third-party country (the UK) and trusting that country to manage its border. These checks have provoked logistical difficulties in processing goods, including foodstuffs.

In March 2021, the UK government announced unilaterally that it would extend the grace period to apply the new rules (specifically on food controls) by a further six months. The EU responded by commencing legal action. By April 2021, Northern Ireland had seen extensive rioting in predominantly unionist communities, arising from public anger over the Protocol—and specifically its effects in creating barriers between Northern Ireland and the rest of the UK. Further challenges in keeping open the land border between Ireland (in the EU) and Northern Ireland (in the UK) while managing the new customs requirements, as well as differing interpretations of the Protocol and its interpretation, are likely to cause ongoing EU-UK disputes.

p. 250↵A second area of tension is internal security. Despite agreements in the TCA between the EU and UK on sharing passenger name record data, and continued UK access to some EU databases and extradition arrangements, a House of Lords report on Part Three of the TCA—the part that covers Law Enforcement and Judicial Cooperation in Criminal Matters—highlights the gaps which have arisen as a result of the UK’s third-party status vis-à-vis Eurojust and Europol, the loss of access to the Schengen Information System (SIS II), as well as the erosion of the ‘influence and leadership the UK previously enjoyed in shaping the instruments of EU law enforcement and judicial cooperation’ (House of Lords 2021: 3).

Finally, both sides need to find ways to manage post-Brexit governance arrangements. In this respect, two treaty-based governance structures have been established: the UK-EU Joint Committee that services the Withdrawal Agreement, and the Partnership Council that manages the TCA (with some 20 joint committees reporting to it and a joint parliamentary assembly to scrutinize it).

p. 251↵The EU-UK relationship will continue to develop in response both to bilateral dynamics and the broader global context. Although most EU leaders and policy-makers regret the UK’s decision to leave, the process of managing Brexit concentrated the minds of the remaining 27 member states—they came together to deal with a difficult issue in spite of their differences across a range of political and policy issues. Diplomats and officials from smaller member states were encouraged by the EU-27’s support for Ireland’s preferences regarding the Northern Ireland border, which were not compromised in order to reach an agreement with the UK. Brexit pressed EU leaders to think—in a concrete way—about the nature of the single market and how best to preserve it from fragmentation or unfair competition. Given that it has removed one of the most powerful member states, Brexit has also altered the balance of power within the EU, both accentuating the Franco-German dyad and forcing Northern European states that often aligned with the UK on economic policy (for example, the Netherlands) to think about new alliances. Nevertheless—and despite the impressive cohesion through Brexit—the EU faces a range of policy challenges and a number of significant political and policy differences persist among the remaining 27.

10.3.1 COVID-19 and the European economy

Throughout 2020–21, the pandemic had a major impact across Europe. The EU initially had a secondary role because the immediate policy response—principally involving healthcare provisions and ‘lockdown’ legislation that restricted social and economic activity—were national, not EU, policy responsibilities. However, as the pandemic spread, the potential benefits of EU-level action persuaded member states to agree to the joint procurement of personal protective equipment (PPE) and of vaccines, on the grounds that better deals could be secured by negotiating as a bloc.

The extremity of lockdown measures during the pandemic had severe economic consequences for all member states. The EU agreed in March 2020 to suspend its fiscal rules and to relax its state aid rules, enabling member states to introduce fiscal packages and support for business aimed at containing the economic fallout of the pandemic. The EU also redeployed its own budget, notably suspending co-financing obligations on cohesion policy spending. As member states imposed travel restrictions, the Commission stepped in to ensure some degree of coordination and to ensure that supply chains were maintained across borders. It rapidly became clear that the economic impact was greater for some member states than for others, and was particularly hard on those where tourism is a big sector of the economy, several p. 252↵of which had a more limited fiscal capacity available to handle it. This raised the prospect of a serious economic decline in those countries, a decline so great as to threaten the cohesion of the EU single market and the euro, not to mention bringing dire social consequences and possible disorder.

In tackling COVID-19, the EU attempted to learn from past experience: during the 2009 swine flu pandemic, pharmaceutical companies played EU countries off one another to charge more money for vaccines. This time, EU countries agreed to let the Commission handle the negotiations. There was also a strong feeling of being in it together: in the words of German Chancellor Angela Merkel, ‘A high number of vaccinated people in Germany, combined with many who are not vaccinated in our neighborhood, would not be to Germany’s benefit. And that’s why we don’t want to do national solo-runs. We believe that the most effective health protection for us can be achieved through a common European approach’ (Politico 2021).

While this helped to promote a stronger sense of solidarity across member states, differing speeds and perceptions of how effectively populations were being vaccinated (or again sequestered in lockdowns) also produced anger at the Commission’s perceived reactive rather than even-handed decision-making. In January 2021, worried that regional supplies would be outstripped by pre-ordered exports, the Commission briefly envisaged invoking the safeguard clause of the Northern Ireland Protocol to block delivery of COVID-19 vaccines to Northern Ireland (although it backed down within hours following angry reactions from both the UK and Irish governments). In some areas, like the joint procurement of masks, gloves, and ventilators, EU-wide cooperation worked well. In other areas, specifically vaccines, the deals signed by the Commission with pharmaceutical companies left the EU further down the queue than certain other countries, sparking much dissatisfaction in early 2021. However, a competitive scramble of individual member states would have left smaller and poorer states behind.

Shifts in the timing, size, and rollout of pre-ordered vaccines were initially part of the problem; the EU, for instance, ordered roughly 80 million doses from AstraZeneca, which then announced a sizeable reduction in its delivery to 31 million, blaming production problems. Perceptions that states including the UK (as well as some EU member states), had agreed contracts with pharmaceutical companies not only earlier in the development process, but separately from the Commission’s attempt to manage the entire process on behalf of the EU, worsened the sense of intraregional rivalry between member states, prompted further demands for export stoppages, and deepened tensions between the EU and the UK in the first months after Brexit. By spring 2021, outright embargoes gave way to a more methodical plan for EU export control but, as this involved limiting exports, it remained controversial. Despite facing shortages at home, the EU—in conjunction with other states, and the World Health Organization—was in the vanguard of the Covax scheme designed to ensure that the global supply of vaccines reaches poorer states with little or no access to domestic vaccines, helping them to catch p. 253↵up. However, vaccine diplomacy remained controversial both within the EU and between the EU and third-party countries.

In July 2020, the European Council agreed to a €750 billion response package, branded NGEU. Financed by the issuance of common debt, through EU sovereign bonds, NGEU was designed to support member states with the economic impact of the pandemic (see Figure 10.2). This was not without controversy. Four member states—dubbed ‘the frugal four’ and comprising the Netherlands, Austria, Denmark, and Sweden—initially resisted the proposals, concerned about the creation of new budgetary ‘own resources’ for the EU, the overall level of borrowing, and how it would be repaid. The four finally approved the plan for the NGEU after securing compromises, as well as increases in the rebates they receive on their contributions to the EU budget.

Open in new tab

Figure 10.2 Next Generation EU: A COVID-19 recovery package

Notes:

Figures are reported in 2018 prices.

The NGEU provides for €390 billion in grants and €360 billion in long-term loans to be repaid by 2058. This total of €750 billion is additional to the EU’s €1,074 billion MFF (see Figure 7.1) for a headline total of €1.8 trillion in EU funding during 2021–7. The grants will be committed in the years 2021–3, allocated through a mechanism that steers funds towards member states with higher unemployment rates (over the period between 2015 and 2019) and higher cumulative GDP losses since the onset of the pandemic. The bulk (€672.5 billion) will be spent through a COVID-19 Recovery and Resilience Facility (RRF) and the rest (€77.55 billion) will reinforce existing EU programmes. The EIB was also strengthened, with an extra €200 billion liquidity boost. Furthermore, the Eurozone’s ESM created a pandemic credit line of €240 billion. Also, the ECB embarked on a €1,350 billion Pandemic Emergency Purchase Programme in Spring 2020, extended by an additional €500 billion in December 2020.

Source: © European Union 2020.

The NGEU was hailed by many as a ‘Hamiltonian’ (i.e. radical) move towards greater fiscal union within the EU: for the first time, a sizeable sum—obtained by jointly guaranteed borrowing—will finance expenditure, making the EU the world’s largest issuer of supranational bonds. However, some member states felt that it was still not sufficient in size—or suitable in purpose—to effectively tackle the economic and social impact of the pandemic on the EU. Thus, while the NGEU had the initially positive effect of boosting confidence on financial markets, questions as to the adequacy of its size—alongside the management of skyrocketing levels of government debt—are likely to rekindle arguments about its management in the future.

10.3.2 Global climate change

Climate change as an area generally produces a high level of consensus in the EU. The EU itself played a key role in securing the Paris Agreement and prides itself on having met its initial targets—set in 2008 for 2020—of reducing greenhouse gas (GHG) emissions by 20 per cent, increasing the share of renewable energy to 20 per cent, and making a 20 per cent improvement in energy efficiency, compared to 1990. In December 2019, the European Council endorsed the objective of achieving a climate-neutral EU by 2050 (in line with the Paris Agreement) and, further, endorsing the Commission’s concept of a European Green Deal for a cost-effective, socially balanced, and fair transition to climate neutrality (see Box 10.2). This was translated into a new European Climate Law, agreed by the Council and Parliament in April 2021, providing for an interim target reduction of at least 55 per cent in GHG emissions by 2030. However, the law itself is only the precursor for the enormous range of accompanying EU legislation needed to pull the rest of European law into conformity with these targets. It also gives the EU a platform to spearhead climate policy internationally. In addition to affording the EU itself the opportunity for global climate leadership, EU-UK cooperation in climate change could represent one of the first areas of substantial post-Brexit cooperation between the two.

In addition to the European Green Deal, there are two other areas where EU climate governance is likely to have regional and international effects. The first p. 254↵involves the emissions trading system, or ETS. The ETS lies at the heart of the EU’s attempts to combat climate change across its own region and represents the world’s first ‘carbon market’. The carbon market works on the basis of ‘cap and trade’: a cap (or limit) is set on the sum total of GHG that can be emitted by a given producer (e.g. a factory) within the carbon market. That cap is reduced over time, pushing total emissions down across the market. Industries (sometimes called ‘installations’) purchase emissions allowances from within the market, which they can then trade with other industries. There are only a limited number of emissions allowances each year, to ensure they have a given value within the market. Individual emitters must fully cover their emissions, whether by working within the cap or by trading; if not, they face heavy fines. Those with spare allowances can set them against future emissions or sell them within the market to other emitters who need them to cover their own allowance. The outcome of the ETS system is that GHG are strictly and transparently regulated, helping to drive emissions down while allowing carbon itself to be traded as a commodity, which, in turn, promotes low carbon technologies as well as incentivizing industries to work cooperatively within the system. The EU’s attempt to develop its ETS is a source of tension among member states, with some (for example, Poland) arguing that poorer member states—and poorer citizens across the Union—will be disproportionately impacted.

The second is the EU’s ability to operate as a single climate change actor, representing all of the EU-27 in a single unitary bloc, as party to key climate change p. 255↵conventions, including the UN Framework Convention on Climate Change (UNFCCC). The EU was the world’s first regional economic bloc to submit its overall emissions to the reductions demanded by the Paris Agreement in 2015, committing to reduce its net carbon dioxide (CO₂) emissions by 40 per cent by 2030 compared to 1990 levels. Increasing pressure to set a more ambitious regional target has also caused tensions between member states with differing approaches to climate action. However, the EU as a whole remains committed to long-term climate mitigation, making legally binding its goal of climate neutrality.

10.3.3p. 256 Migration, internal borders, and Schengen

In contrast to climate change, an area in which there has been a low level of consensus in the EU is on migration from outside the EU and, in particular, the most suitable way of handling refugees and asylum seekers. In 2015, Lesvos (also known as Lesbos), a Greek island located at the northeastern edge of the Aegean Sea at the border with Turkey, became a key location for border crossers, many of whom were fleeing violence, persecution, wars, conflicts, and authoritarian regimes. During 2015, over 800,000 border crossers arrived at this Greek island via the Aegean Sea and Turkey, making 2015 one of the largest forced displacements of people since World War II. The island swiftly became the epicenter of the ‘refugee crisis’, creating extraordinary pressures on local resources and exceeding the coping mechanisms of the hosting state (see Box 10.3). The EU has since 2015 struggled with both the policies and the politics of migration.

p. 257↵Greece and Lesvos have acted as key ‘gates’ for predominantly unauthorized border crossings since the 1990s. While the migration crisis focused attention on the many pressing requirements to alleviate the issue, it was the death of Alan Kurdi—a Syrian border crosser child, whose body was washed ashore on Turkey’s coast—that shocked and sensitized both public opinion and EU policy-makers. Kurdi became ‘an allegory of refugeeness’ (Khosravi 2010: 73), the photo itself ‘gave the “migrant crisis” a new face: innocence. It shamed Europe into action’ (Ticktin 2016: 258). The image, in combination with the increased arrivals and death tolls of border crossers, turned the border at Lesvos into a spectacle of death and suffering (Iliadou 2019), attracting celebrities, volunteers and ‘voluntourists’, journalists, academics, NGOs, Pope Francis, the Queen of Jordan—unspaced em dasheffectively inaugurating a ‘refugee industry’—unspaced em dash as well as highlighting the roles and responsibilities of the EU itself.

Managing external borders in relation to both security and humanitarian issues involves complex border requirements, and represents a significant policy challenge for the EU. Since the refugee crisis of 2015, the Schengen area of 22 member states (and five others) in which there are no systematic internal border checks has come under repeated pressure, with the COVID-19 pandemic and terrorist attacks increasing cross-border tensions still further. Border controls have been reinstated by some member states on several occasions (as permitted by Schengen rules). A pressing policy question for the EU therefore is whether the Schengen system is still robust enough to manage such pressures in a meaningful way, and if not, what other systems could replace it? So far, all Schengen members have said that they remain committed to continuing with it, and indeed Romania, Bulgaria, and Croatia are seeking to join it soon, as is Gibraltar (though the latter’s accession requires UK approval).

10.3.4 EU foreign policy

Determining and implementing EU foreign policy are challenging. On the one hand, aspirations to utilize the collective clout of the EU in foreign and security policy have too often fallen short of aspirations. Divisions among member states, in a field that mostly requires unanimity in the Council to take a decision, have seriously limited the EU’s ability to act effectively with strategic partners and competitors alike, including Russia, Turkey, China, and Kosovo. On the other, when using economic instruments decided by a qualified majority—such as financial aid for humanitarian or development goals, or imposing sanctions—the EU has been more effective. The ability to decide upon and enact successful EU foreign policy in a challenging global environment depends in the first instance on achieving a greater convergence of views among its own member states. More radically, it may require a change in the EU’s own decision-making procedures in order to reduce the impasse of national vetoes.

Beyond the EU itself, practical cooperation remains vital, including the regular meetings and information sharing of EU and member state embassies in capitals across the world. In this respect, a key policy challenge is the EU’s ability to forge new, post-Brexit relations with the UK. Brexit renders the UK a third party, not an EU member p. 258↵state, transforming UK relations with the EU into an uneasy mix of treaty-based agreements (examined above) and ad hoc pacts. What does Brexit represent for the future of EU-UK relations? Is it an institutionalized decoupling of UK-EU foreign, security, and defence policy, in which a variety of new options present themselves? Or does it represent a far deeper shake-up of the EU’s overall role as a global actor? While many in the EU may be hoping for a foreign policy alignment with the UK, the current Johnson government, and the UK government’s 2021 Integrated Review of Security, Defence, Development and Foreign Policy suggest that this is unlikely in the short term. In its own dealings with the UK, the EU needs to reconfigure itself on the basis of three post-Brexit realities. First, a future of non-institution-based dealings on virtually all key foreign, security, and defence areas, from the EEAS to all EU-based councils and committees. Second, the current (and likely long-term) UK preference for bilateral and trilateral contact and conventions with key EU member states. Third, examples of UK ‘stand-alone’ policies (including the government’s ‘Global Britain’ strategy) illustrating its determination to be separate from, rather than auxiliary to, the EU’s own foreign policy goals.

The range of regional and global upheavals that have occurred in the past decade mean that the EU must determine what kind of foreign policy ‘actor’ it wishes to be. In September 2019, incoming Commission President von der Leyen announced her vision for a ‘geopolitical Commission’. The original idea stemmed from a profound need for EU action: from reworking EU-UK diplomacy to tackling declining relations with the US and China; from frozen neighbourhood conflicts to the perceived crisis of multilateralism. None of these issues has disappeared. Indeed, as current policy challenges, many are now chronic, including the vulnerability of Europe’s own supply chains, as well as enduring volatility in flashpoints like Belarus, Ukraine, the Eastern Mediterranean, and Mali. A geopolitically self-confident EU would be a much-needed addition to the global landscape.

A second theme is that of European strategic autonomy, which involves defining (and possibly extending) the overall scope of EU external action, including its defensive capability. The absence of the UK may enhance the overall ‘permissive conditions’ needed for more ambitious EU diplomatic and defence ambitions. Equally, the EU itself needs to redefine its strategic priorities on its own terms, in terms of its immediate neighbourhood, its strategic partners, and the wider world. From the US perspective, the Biden administration will support and encourage a more proactive, organized EU, including the general development of European strategic autonomy. It is after all ‘in the interest of Europeans that they act strategically to advance their own security and prosperity—and the trans-Atlantic relationship remains essential to that strategic picture’ (Baer 2021). What is less clear to non-EU audiences is how the EU itself defines strategic autonomy: as long-term plans designed to anchor the interests of the world’s most integrated region or random attempts at unilateralism?

In being able to take decisions on geopolitical and defence-related issues, a third theme is the EU’s method of foreign policy decision-making. In June 2021, German Foreign Minister Heiko Mass called for the abolition of the right of individual p. 259↵member states to veto foreign policy measures, as the 27-nation bloc could not allow itself to be ‘held hostage’ (for example, in April 2021, Hungary blocked an EU statement critical of China’s new security law in Hong Kong). A shift from unanimity to more extensive QMV (e.g. in areas like sanctions) would enable the EU to respond more swiftly and comprehensively to short- and long-term challenges. However, such a shift itself requires unanimity and for some the status quo remains acceptable.

The final theme represents the complex geopolitical choices that the EU has to make if it wishes to remain both a regional leader and a global actor. These include relations with China, which demand a careful balance between confrontational US attitudes towards Beijing, ongoing UK pragmatism, and the EU’s own connections fostered by the new EU-China investment agreement. Managing the quadrilateral challenges between itself, China, the US, and the UK will be a challenge for the EU. President Biden is likely to continue former President Trump’s attempts to rein in Chinese tech and trade power, and to heighten human rights issues. For its part, the EU will likely wish to keep the momentum of its (as yet unratified) EU-China Comprehensive Agreement on Investment. However, US-China (and possibly UK-China) tensions could prove challenging for the EU. As recently argued by the Centre for European Reform (CER; see CER 2021: 5), ‘the worse the tension between the two superpowers, the harder it will be for Europe to navigate between them’. Equally, the construction of viable post-Brexit relations with the UK (including work on climate change) will be warmly regarded by the Biden administration.

In addition to China, the EU faces complex and historical tensions between itself and Russia. The EU’s initially lacklustre response to the disputed 2020 Belarussian election coupled with the unimpressive performance by EU High Representative / Vice-President Borrell in Moscow in 2021 suggest the EU’s ongoing preference to sidestep Russia’s logic of ‘spheres of influence’, both geopolitically and geoeconomically (e.g. the Nord Stream 2 pipeline). This in turn makes challenging the EU’s ability to engage impactfully with the states making up its Eastern Partnership, including Ukraine, with persistently unclear responses by the EU between the integrationist ambitions of Eastern Partnership states and the institutionalized, if slow, accession processes in Balkan states. Indeed, the Eastern Partnership states themselves remain prominent reminders of the future challenge of EU enlargement (see section 9.3.4). Lastly, as covered in previous chapters, the EU faces the geopolitical and humanitarian challenges of responding effectively to migration hotspots across the Maghreb and the Mashreq in 2021, including Libya and Syria, as well as potential pressures arising from Afghanistan.

Getting the EU’s foreign affairs toolkit right is key. Establishing European strategic autonomy is one thing. But the EU’s ability to work effectively with third parties in terms of trade, competition, and investment is crucial. One area in which the EU’s historic strengths could see it prosper internationally is in the field of ‘regulatory diplomacy’, i.e. helping to write the rules for significant treaties or conventions, and helping to broker agreements. Emboldened through Brexit negotiations to establish a level playing field with the UK, the Commission has seized the p. 260↵opportunity to strengthen its regulatory structures still further in order to protect European firms from unfair foreign competition, including new rules on foreign investment screening (e.g. Chinese and Russian companies with alleged military ties), reforms to curb the distortive effects of foreign subsidies on the European market, and mergers to generate ‘European corporate champions’. It may seem a world away from the challenges of engaging proactively with its neighbourhood, but regulatory diplomacy, which in turn could enhance the EU’s overall governance, could help EU member states build a union sufficiently strong to underwrite its burgeoning global ambitions.

From a budgetary perspective, the challenge for the EU is to simultaneously tackle its own internal requirements while supporting strategic goals at the global level (chiefly climate change, as part of the European Green Deal), in addition to prominent foreign policy goals in its neighbourhood, development policy, security and defence, as well as actively supporting the UN’s Sustainable Development Goals (SDGs). To tackle this multifaceted challenge, the EU budget now contains a new instrument: the NDICI. Bringing together a range of very different areas, programmes, and funding methods, the NDICI has the potential to deepen the EU’s connections with its neighbourhood partners, widen the scope of EU development funding, and ensure that international cooperation in general can cover areas from human security to climate and biodiversity. However, if NDICI funding for key areas is limited or repurposed in future years, only some programmes could realistically be undertaken. The question therefore is what the EU should be doing as a regional actor. Much depends on the very definition of ‘development challenges’, as well as the EU’s ability to respond to non-climate crises driven by geopolitical upheavals, state failure, border complications, and migration pressures.

10.4.1 Capacity (decision-making and budgetary)

The areas in which the EU is most frequently seen to fail are those where its member states have conferred policy competences upon it, but have clung on to unanimity as a decision-making rule. These fields include foreign and security policy, fighting tax avoidance, some provisions in the field of JHA (notably regarding family law and cross-border police cooperation), the granting of new rights to European citizens, anti-discrimination measures, the EU’s own p. 261↵budgetary resources and MFF for its expenditure, certain institutional issues (notably the electoral system and composition of the Parliament, the seats of the institutions), and the flexibility clause which allows the EU to act to achieve its objectives in the absence of a specific legal basis in the treaties. Unanimity—minus the vote of the state in question—is also required to suspend a member state in breach of the values of the Union (respect for human rights, democracy, and the rule of law), making it impossible to take such a decision when there are two or more such states backing each other up. Changing this situation itself requires unanimity and, except in a few cases, national ratification. This has become a tall order. The pressure (or concessions in other fields) needed to persuade reluctant members to agree on such treaty changes is high.

On matters requiring expenditure, the EU’s capacity to act is also constrained by the limits placed on its budget. The ceiling on the EU’s own resources (of 1.2 per cent of the sum of all the member states’ GNI) and the breakdown for each category of expenditure set in the MFF, limit expenditure and create a rigid pattern that is difficult to change. The new NGEU borrowing to spend is a historical innovation but it remains to be seen whether this is a one-off.

10.4.2 Accountability (and democracy)

Each successive overhaul of the EU treaties has looked at this question and cumulatively changed the EU system, from one in which all key decisions and appointments took place behind closed doors in the Council, to the system described in Chapter 3 with a key role for the EP and a greater involvement of national parliaments. Yet, there remain gaps in the current system. Competition law and taxation do not require EP approval. Several national parliaments make little use of the period given to them to scrutinize legislative proposals (and potentially mandate their minister) prior to the Council’s deliberation on them. The exercise of implementing powers by the Commission is subject to little or no prior scrutiny by any parliament.

A major focus of debate in recent years has been over the appointment of the Commission president. The practice of European political parties nominating their candidate for this position ahead of the European parliamentary elections, described in section 6.3.4, did not result in any such candidate becoming president of the Commission in 2019. Instead, the European Council proposed a compromise candidate, Ursula von der Leyen, who secured a narrow majority in the EP. Does this mark the end of such a system? Or is it like what happens at national level in, say, Italy where every party has a candidate for prime minister ahead of national parliamentary elections, which sometimes results in one of them being proposed to parliament by the head of state and securing a majority (for example, Berlusconi in 2008), but can equally lead to a compromise name being found (for example, Conte in 2018). The political parties will almost certainly nominate candidates again in 2024, but it remains to be seen whether the bargaining after the election will lead to one of them becoming Commission president.

10.4.3p. 262 Conference on the Future of Europe

At the end of 2019, the EU agreed to hold a ‘Conference on the Future of Europe’ with the aim of examining the medium- to long-term future of the EU and what reforms should be made to its policies and institutions. It is the biggest consultation exercise with citizens ever organized by the EU (outside of elections) with events and discussions held in all member states, a multilingual digital platform on which groups and citizens can place their ideas, four randomly chosen citizens panels, and a conference plenary composed of national parliamentarians, MEPs, governments, social partners, regions, and civil society representatives (see European Parliament 2019b). The Commission, Council, and EP have all approached the Conference with a set of positions emphasizing their distinctive institutional interests (see European Policy Centre 2021). Taken together, these positions reflect the range of issues discussed throughout this book. All three institutions stressed the Conference’s potential to strengthen the EU’s democratic legitimacy via suggesting permanent mechanisms of engaging citizens about the EU’s future development, making it easier for EU citizens to influence policy-making beyond voting in EP elections. Although the EP was open to the Conference’s output leading to treaty change, the Commission’s position preferred treaty changes—given the political difficulties that attach to them—to be a last resort, a position shared by most member states, who do not welcome the possibility of national referendums.

The Conference has the potential to generate a widely agreed set of reforms or extensions to EU policies and changes to the way it works. It also carries significant risks, either of failure to agree on a broadly supported set of recommendations, or failure by the EU and/or its member states to adequately follow them up. Due to start in May 2020, the conference was postponed for a year due to the COVID-19 pandemic. In April 2021, the Conference’s digital platform was launched.