Brexit: the real fight begins on 24 June

Whatever the result of the EU referendum, the real work of redefining Britain’s relationship with Europe will begin on after the polls close, says Dr Pippa Malmgren.


Whatever the result Britain will need to redefine its relationship with Europe

Voters in the EU referendum should know that the Brexit decision is far from binary: both paths can lead to success and both can lead to failure. The outcome depends not on the in or out decision but on the choices Britain makes about how to govern itself after that.

Staying in means the UK has to work with the European Commission as one of 28 members, something which the former president of France, Giscard D'Estaing, says is already "ungovernable" without profound reforms.

If Britain chooses out, it will have to decide what kind of governance it wants. It could, for example, have an even freer immigration policy than the Commission now provides (you can be pro Brexit and pro immigration). You can be pro Brexit and love Europe, even a unified Europe, but not love the current configuration of the EU. You can also be pro-Brexit and want an EU that can progress without tearing itself apart, which, sadly, it seems to be doing.

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The British seem to overlook the simple question: will there be anything to exit from? Europeans are increasingly voting for radical change: as many as 50% of Italians want out of the euro, and the anti-euro Five Star Party has just won 19 out of 20 mayoral elections.

The Dutch, Danish, Austrians, Poles and Greeks all increasingly support anti-EU and anti-euro policies and politicians. That does not mean the EU will fall apart, but it does mean that the other member states also recognise that the effort to create "ever greater union" is delivering ever-less acceptable outcomes. Something has to change.

There are those who say a Brexit will kill the EU. If so, it is not a very robust construct. It will be vulnerable to other "exiteers" Denmark, Sweden, the Netherlands, Greece, etc. A departure won't cause problems in the EU, it will just reveal the problems in the EU, no matter who goes first.

It would be easier if the British and the other members were simply being asked to reaffirm the original European deal they signed up to, which was a Europe of nation states. But, sadly, that deal, the "old EU", is not on offer.

It was based on the principles of subsidiarity and proportionality which permitted the British, and others, to be a member of the club without having to hand over all its governance and sovereignty to it. These now forgotten concepts meant that Brussels respected sovereignty. States would make their own rules and laws unless the EU needed to mediate or harmonise something that all agreed upon.

The "new EU", in contrast, is a top down machine that imposes its will over the top of domestic objections. It provides no democratic recourse for its members, should they want to change the law. It seeks to move fiscal and rule making sovereignty away from the member states to Brussels.

The practical consequences of staying in the EU are going to be real. Last year the EU proposed that all company law, bankruptcy law and employment law should be "harmonised". We can be sure the British model will not be imposed on the Continent. Most likely quite the opposite is coming.How ironic that so much of Europe's talent has sought to emigrate to Britain, the one place that has retained economic growth and freedom for its citizens.

One wonders why it is necessary to do so much trade with a part of the world that isn't growing and can't grow in the EU as it stands. Why commit to immigration policies that seem to require the EU members to build physical barriers and walls?

This is why everyone is voting for change. A Remain outcome will also demand that the EU changes. The question is: what has to change and can the EU be modified?

Two broad tracks will appear once the vote is done: the Remainers, if they win, will need to find new ways of compelling the Commission to move in a less autocratic, domineering direction. Of course, a British remain vote could encourage the EU to believe it is already on the right path and encourage it to speed up.

The Brexit camp is voting against the establishment which it feels has failed to deliver on its promises. It is true: the system, as it is currently run, has failed to deliver. Britain would have more freedom to forge its own path outside the EU but many fear retribution. But financial services and the real economy alike will do better with lower taxes and less regulatory demands.

Do we want a society that is driven by the voters and citizens from grass roots concerns or do we want a top down body politic that can impose its will without any recourse? Do we want more freedom for the power of the individual to generate a profit or more power for the power of the state to tax the individual? As it stands, the EU members neither abide by the Maastricht Treaty demands for sound finances, nor deal with the dreadful debt situation arising from that choice. It will be hard for many to agree to remain in an EU that has produced what Greece is today, a failed state in the middle of Western Europe.

The system clearly needs changing. Nobody is happy with the crony, corporatist version of capitalism that seems to overtaken many countries, Britain included. But that does not mean that the answer lies in a more regulatory suprastate. In fact, more regulation usually spurs more gaming of the system and empowers those who have resources. The more rules, the fewer have ownership, control and power.

Nobody talks about restoring Western European capitalism to the benefit of the small businesses that generate two thirds of the net new jobs and almost all the innovation. Perhaps the question is not whether you prefer big business or a big state; perhaps the question is how can we govern in such a way that we encourage both small business and a small state?

Everyone will ask these questions not just the British. These governance questions will dominate the future from one minute after the Brexit voting is complete. On the 23rd, the voters simply decide whether to fight inside the house or out in the garden. On 24 June, the battle for the future will really begin.

Dr Pippa Malmgren is a former US presidential adviser and author of the best-selling book Signals: How Everyday Signs Can Help Us Navigate the World's Turbulent Economy

Dr Pippa Malmgren (@DrPippaM) is a former US presidential adviser, and best-selling author of Signals and Geopolitics for Investors.