Brexit Uncertainty: Governance of Europe and its Economies Beyond Destabilizing Fears

British democracy has yielded a “yes” vote on a historic “Brexit” referendum to the dismay of internationalists and the financial markets.  With Britain set to leave the European Union after more than forty years of open economic and diplomatic relations, the will of the British People has sparked fears that are feeding uncertainty around the world.  On the one hand, Great Britain’s exit from the European Union is the greatest challenge to the unified governance of Europe.  On the other hand, the Brexit is only a product of the EU’s far deeper political and economic problems. 
​
Consequently, far greater geopolitical shifts in European governance are likely on the horizon. From an American perspective, the international governing institutions of the European Union always seemed to contradict Europe’s strong cultural diversity and independence.  Whatever the fate of the EU happens to be, dramatic political and economic shifts represent the greatest potential threats to the countries and Peoples of Europe.  Europe faces a great deal of uncertainty that can only be mitigated by strong leadership capable of envisioning a path forward and producing policies that usher in a new era for all of Europe.

National interests change with time, thus treatises and treaty Law must be recalibrated to serve the shifting interests of allies.  Unfortunately, diplomatic and economic arrangements like the European Union are perceived as permanent institutions of international governance.  Because their existence is seen as unshakeable, there is tendency for the policies and roles of these international institutions to stagnant, even when they become misaligned with the interests of nations like Britain to the point they no longer serve the national interests of their member states. 

The European Union can be rationalized as a means to empower smaller nations incapable of balancing US influence alone.  Albeit supported by the US government as a way of creating an equivalent trade partner for the US economy, Americans see the European Union as an extraneous layer of government that impedes the representation of individual Europeans and threatens democracy by creating distance between the Peoples and their policymakers.  Clearly, the British People agree while backlash to the Brexit referendum demonstrates the kind of political and economic pressure that suppresses the interests of the People. 

In truth, the European Union is a threat to democracy, despite European views that support opening borders in order to create free and open societies.  Distance creates a lack of access to representation.  That is, the more layers of government that exist, the less responsive governments become to the needs of individuals and individual communities.  In providing for the common defense and economic welfare of EU members, diplomatic institutions of the EU are rapidly superseding the authority of the democratically elected national governments of European countries.

Furthermore, the European Union was formed during a time of plenty when fiscally irresponsible behavior on behalf of governments and individuals could be ignored.  Fed on debt-funded “development” the EU was an economic bubble built for times of prosperity.  No longer providing cash and opportunities for growth, the high-valued Euro currency only improvises poor countries by inflating costs while offering little more than added responsibilities.  Due to the uncertainty and struggles of today, the EU is little more than a weight on the largely prosperous economies of Germany, France, and Britain.  

That said, economic theory alone is not enough to understand the economy.  Wise investors understand human psychology drives the daily ups and downs of the markets while insightful entrepreneurs recognize their consumers do not solely make buying decisions based on rational, cost-benefit analyses.   Although the economic activities of people and countries will reflect what they perceive are rational decisions over time, people are not solely motivated by their economic interests.  It is, therefore, necessary to examine the influence of cultural and political interests on public policy separate from the influence of economic interests.
 
Just as financial struggles stress personal relationships, they stress the diplomatic relationships between nations.  As stressors, economic issues enflame inherent differences and conflicts of interests.  In other words, Europe’s economic woes are stressing social weaknesses in the European Union, but they are not the cause of Europe’s division as deep divisions have existed for centuries.  The European Union may have unified the governments and economies of Europe, but the EU never socially unified the cultures of Europe.
 
To understand the breakdown of the European Union, it is necessary to recognize their ethnic, cultural, and political diversity of the continent.  In good times, Europeans were able to ignore their differences and deeply-entrenched historic grievances with each other to support international institutions that would supposedly guarantee their diplomatic, national security, and economic interests.  Now that it is clear that their common interests are no longer being served by the European Union, members of the European family can no longer accept the intrusions of foreign cultures.
 
To address this reality and to avoid the fallout of a European Union collapse, business and political leaders must learn to treat Europe’s business dealings separate from its governance.  The problem with the European Union as a whole is that it seeks to govern all of aspects of European life.  In doing so, the diverse interests of the European Peoples are not being addressed.  More importantly, the European Peoples no longer feel their interests are being represented by their governments, which appear more and more subjugated to the international governing institutions of the European Union.