The Triumph of Populism

They did it. The poorer the region and the less immigrants around, the more votes in favour of Leave. Britain will leave the EU. Unlike financial markets which will quickly absorb the economic fallout, the political fallout only start to emerge. The U.K. is at the begin of a constitutional crisis with Scotland and Northern Ireland, plus London, in strong favour of staying in the EU. The island of Ireland will again have visible and controlled borders. Scotland will go for a second referendum in short-time. London will have to come up with smart policies o keep its financial centre. Britain will have to deal with a diminished political status on the global scale, and lan the hard way that the Commonwealth, well, is a project of the past. It will descend on a lower macroeconomic growth path, with implications for the welfare of the majority of its citizens. It will experience years of negotiations with the EU and others about new economic relations now that the EU umbrella will be gone. It will have to deal with a so far limited current account crisis, and a British Pound that will long-term show a lower value. It will lose the huge inflow of European research funds, very much to the detriment of its universities. It will have to come to grips with a lower inflows of skilled young worker, and all that in a situation of a rapidly aging population. And it will have to deal with the loss of its reputation as a pragmatic and reasonable nation.

Reconciling the political and cultural gap will be a mammoth task. The victory of the Leave camp is a victory of a backward-oriented national populism with a strong dose of xenophobia and neoliberalism. It is a victory of the old over the young. It is a victory of anger and scare – a poisonous mixture with all the potential to turn the UK into a borderline nation. It is also a crashing defeat of a tired European political elite who turned the project of European integration into a technocratic enterprise that missed any social empathy, not to talk about political will to design alternatives to self-constructed economic constraints. It is a defeat of a neoliberal and austerity turn of political elites who were more willing to listen to financial markets then able to transcend their narrow-minded views on economic imperatives. It is in particular a defeat of the German political class that used its dominant economic position to follow through with a disastrous economic policy project that undermined the social and economic stability of the EU. It is a crushing defeat of the Labour Party that under the leadership of Corbyn lost the core of its workers’ votes, and never came up with a positive vision for the UK in a non-neoliberal Europe.

Brexit is neither the end of the world nor the end of European integration. However, Brexit quickly may get its Italian, French, Dutch and so on counterparts. It would be silly to assume that the project of European integration would move along, as – for example – Chancellor Merkel suggested today. The EU is on a crossroad, and Brexit – even though for the wrong reasons – demonstrated this with full force. When all the Brexit dust will have settled, it will be up to a new political class to decide which way to go.