Mendoza School of Business

Panel analyzes impact of Brexit decision

Published: August 30, 2016 / Author: Lucas Masin-Moyer

Perhaps the most important geopolitical event of the summer happened completely outside the context of the United States’ presidential election, which has otherwise dominated news coverage. This event, dubbed Brexit, occurred on June 23, when the people of the United Kingdom voted to leave the European Union (EU).  

The Kellogg Institute for International studies hosted a panel Monday on Brexit, featuring four Notre Dame professors — associate professors of political science Sebastian Rosato,Emilia Justyna Powell and Andrew Gould and professor of finance Jeffrey Bergstrand.

Rosato began the panel by discussing the importance of nationalism in contemporary European politics.

“Nationalism in Britain [shown by the Brexit vote] is just an example of the fact that nationalism is back all over Europe and because of this, the European Union’s days are numbered,” Rosato said.

Rosato said that this nationalism, coupled with a desire for increased sovereignty, prompted the British decision to leave the United Kingdom — a decision which he believes spells trouble for the EU’s long-term future.

“Dissatisfaction with the EU is at an all-time high,” Rosato said. “Nationalism and a desire for sovereignty is back and all over. The number of leaders who are talking about holding referenda or re-negotiating, which means not more union but less union, is rising.”

Powell then discussed reactions in Eastern and Central Europe to Brexit.

“The member states to the east of Germany feel very uncertain about Brexit,” Powell said. “They are blocking any deals between the European Union and Britain that would try to delimit free movement and trading access, because many of the citizens from these countries live in the United Kingdom.”

Powell said Poland especially was unhappy with Brexit.

“Poland was quite upset with Britain leaving,” he said. “This is the case because Britain was one of the biggest allies of Poland in speaking out against ‘Brussels Federalism,’” referring to where the headquarters of the EU is located in Belgium.

Bergstrand said the United Kingdom has always been somewhat independent from the rest of Europe, especially seen in its resistance to adopt the Euro. Bergstrand said he believes that this, accompanied by economic factors, helped to spurn Brexit.

According to Bergstrand, the regions which voted in favor of leaving had characteristically low per capita income, a low standard of living, low education and a predominance of people who did not have a high school education.

Bergstrand said he sees shades of what has happened in the United Kingdom in the increased populism of U.S. politics. Bergstrand said he believes that could lead to increased isolationism, which he sees as deeply troubling.

“This is one of the most respected economies in the world going down a dark path, and we’ve had this isolationism going back to the Great Depression,” Bergstrand said. “Countries went back and forth raising tariffs and caused the great recession of the 1920s and early 30s to become the Great Depression.”

Read the entire story on The Observer website.