EU Referendum Forecast: Could a Brexit Trigger a Domino Effect with Other EU Nations?

Britain’s EU Referendum is right around the corner, and speculation about how the country will fair if it happens to leave (or Brexit) the European Union is going into overdrive.

But what about the rest of the European Union? While it’s possible that Britain could make history and become the first country to leave the EU since its reformation in 1992, it is not the only country with the option. Article 50 in the Treaty on European Union plainly states; ‘Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.’

Contagion of a UK Exit from the EU – Would Other Countries Follow Suit?

Virtually every member nation of the European Union has had to appease Eurosceptic (that is, those who are sceptical towards the EU) groups and parties since the formation of the EU. There was even scepticism towards its predecessor, the European Economic Community (EEC).

In a series of polls conducted and released by Ipsos MORI in May 2016, over 10,000 citizens from EU nations and a few non-EU nations were interviewed about the possibility of a ‘Brexit’ and asked other EU Referendum-related questions.

The poll was held between March and April 2016, when ‘Brexit’ debates were beginning to dominate global headlines. The outcome of the poll even created headlines itself after its results indicated that almost half of those asked said they would want an EU Referendum to be held in their own nation.

Analysts responded to the poll’s release by suggesting that the possibility of Britain leaving the EU in June wouldn’t just impact the Eurozone, but could even cause a ‘domino effect’ of other EU nations leaving the 28-member bloc themselves. Not only that, but other recent research, according to the BBC, has indicated that Euroscepticism is rising in other nations.

So here are four well-known European Union member states with unique positions in the EU – and why many speculate that these countries in particular may push to leave if we see a ‘Brexit’.

Greece and a Possible ‘Grexit’

Greece is something of an elephant in the room when it comes to discussing withdrawal from the European Union. While the aforementioned Ipsos MORI poll did not include Greek participants, speculation of a Greek exit, or ‘Grexit’, from the EU has already been rife for years.

While the nation’s economic crises have been relatively well publicised by this point, the Greek government have been under a considerable amount of economic debt and strain since the aftermath of the global 2007-08 financial crisis.

Due to high government spending in Greece compared to its peers in the EU, falsified GDP before joining the Eurozone, and an inability to pay off loans, there have been calls for the nation to abandon the common currency bloc, which could spell the end of the nation’s time in the European Union too. Some argue this would leave Greece to minimise further damage to the Eurozone while recovering its economic independence.

But does Greece want to leave the either the Eurozone or European Union? The core reason ‘Grexit’ calls appeared in the first place was the affect that Greece’s economic issues were having on the Eurozone as a whole.

Various other EU member nations felt like Greece had broken their trust and dragged the rest of the Eurozone into worse economic straits (according to The Telegraph) with EU members being saddled with helping pay off Greek government debts. Angela Merkel, the Chancellor of Germany, stated of the Greek crisis that ‘The most important currency has vanished with Greece – and that is trust.’

Greece’s reasons for leaving are largely Euro-related, with some arguing that Greece should leave the Eurozone but not the European Union entirely. However, the legal possibility of a nation that wishes to leave the Eurozone but not the EU is widely unclear.

According to Greek Reporter, polls conducted since 2015’s ‘Grexit’ scare revealed that a majority of Greek citizens asked would prefer to stay in the Eurozone than return to the Greek Drachma. This is due to the perceived plummet in value of an independent currency as well as loss of international relations.

As such, Greece’s current situation means it is far more likely to ‘Grexit’ as the result of being forcefully ejected by the European Union itself than it is to leave via a domestic referendum.

A nation leaving the Eurozone could be a huge and unknown potential threat to other Eurozone nations. Greek citizens also likely to want to remain in the European Union, so a real ‘Grexit’ is unlikely despite ongoing economic issues.

This makes it a considerably different situation to Britain’s, despite the uncanny similarity between the buzzwords ‘Brexit’ and ‘Grexit’.

Could France Leave the European Union?

Don’t worry, I’m not going to subject you all to the word ‘Frexit’. At least not yet.

As reflected in the recent Ipsos MORI poll, a considerable 55% of French citizens asked believed that their own nation should hold an EU Referendum. 41% said they would vote to leave in the event of such a referendum.

According to The Independent, the French are also the EU nation who are the least eager for Britain to stay in the European Union. Some respondents to the survey suggested that the UK would be better off without the EU and others claimed the UK should leave regardless of the consequences. 44% of French respondents asked believed that the UK should ‘Leave’, compared with other nations like Germany where 73% asked wanted the UK to ‘Remain’.

But, as one of the nations that most adamantly defended Greece from ‘Grexit’ calls, why are French citizens now growing Eurosceptic?

The French rise in Euroscepticism has become increasingly evident in recent years with the far-right nationalist party, the ‘National Front’, surging in popularity and influence. In 2014, the party won first place in the European Parliament election, with 24.86% of the vote. In 2015’s regional elections, the party also gained considerable victories throughout France.

Multiple French presidential candidates have also promised EU Referendums in their bids for support, reflecting the increased amount of polls suggesting that France would like an EU Referendum of its own. France is fostering a growing number of Eurosceptic parties, ranging from right wing to left wing. Leader of French party ‘The Republicans’, Bruno Le Maire, has promised to hold a Referendum by 2022 if he is elected as president in 2017.

With Euroscepticism still rising in France, it is among the countries most likely to follow Britain out of the EU in the event of a ‘Brexit’.

Denmark – Is a ‘Dexit’ from the EU on the Cards?

Denmark is unlike most other European Union member states, in that it negotiated a unique role within the Union during the EU’s original formation, just like the UK did.

Similarly to Britain, Denmark’s conditions for joining the EU included being able to keep its national currency, the Danish Krone. While many parties and citizens wished to hold a referendum on adopting the Euro after its physical introduction, support for Euro adoption plummeted in light of the Eurozone’s economic troubles.

Other conditions included exemption from the EU’s criminal justice and home affairs systems. These were negotiated in 1993, after the first EU treaty was rejected by Denmark in a 1992 referendum.

Denmark’s main reason for joining the 28-member bloc in the first place was to keep the nation’s strong agricultural links to the UK. As a result, there are immediate and obvious concerns about Denmark’s future in an EU that doesn’t include Britain.

As with France, there are multiple Eurosceptic parties in Denmark, including the ‘People’s Movement against the EU’, and the ‘Danish People’s Party’ – which stated last year that it would push for a full EU referendum if it ever came into electoral power. The nation is also no stranger to rejecting EU influence – the BBC reported as recently as December 2015 the nation’s citizens had voted ‘No’ in a referendum on adopting more EU integration.

Due to Denmark’s close economic relationship with Britain, many have speculated that Denmark’s own Euroscepticism is among the reasons the attitude has become more popular in Britain. However, is a Denmark ‘Leave’ really inevitable?

According to ITV, the Danish Prime Minister, Lars Løkke Rasmussen, recently pledged to help the UK remain in the EU. He argued that UK Prime Minister David Cameron’s recent EU reform deal set a precedent that would encourage Denmark and all other EU members to seek their own reforms while still enjoying EU benefits.

In addition to this, back in 2013 the Minister for European Affairs Nicolai Wammen stated that with EU being in turbulence it was not the ‘right time’ to hold referendums, and that Danish politicians remained optimistic towards the EU despite public Euroscepticism.

He argued that being one of the few EU countries without the Euro meant having a close relationship with other individual nations and reasserted that Denmark and Britain would remain close regardless of Britain’s EU status.

However, as it is in Denmark’s best interests for Britain to stay in the EU and remain as an ally, a potential ‘Brexit’ could indeed lead to Denmark following suit.

Germany – Could the EU’s Superpower Abandon it?

You can’t consider European Union members without thinking of one of the institution’s superpowers.

Germany is a global manufacturing giant with a regularly impressive GDP, and is widely considered to be one of the world’s most influential economies.

As a result, it is commonly speculated that the nation has grown frustrated with the Eurozone. This is because some EU nations have comparatively weak economies that potentially weigh on the Euro’s success as a currency, and therefore restrict Germany’s global prowess.

Economic crises hitting nations like Greece have also seen Germany pressured into donating considerable funds to rescue or ‘bailout’ funds on numerous occasions.

News that the Eurosceptic German party, Alternative for Germany (AfG), had recently enjoyed a surge in popularity due to dissatisfaction with issues like immigration and the European Central Bank’s (ECB) Eurozone-wide economic policies also hinted towards rising Euroscepticism in the German public.

However, it could also be argued that Germany in particular has a special connection to the European Union with it being one of the nations that first established the Treaty of Paris in 1951. This treaty was formed six years after the conclusion of World War II and resulted in the creation of the European Coal and Steel Community (ECSC) with the aim of restructuring European economies and ensuring peace. This group was succeeded by the European Economic Community (EEC) in 1958, and eventually the EU in 1992.

Germany has been one of the longest-standing members of a community that has seen them move away from their war-torn past to thrive on the world stage. As a result of Germany’s success, attitudes towards the European Union within Germany are generally more positive than within other member states.

But what about weaker Eurozone nations? Do they hold Germany back and would the nation perform better outside of the EU? Some economists argue that Germany’s trade prospects are actually considerably improved due to the nation dealing with the Euro rather than a strong German currency.

An independent German currency’s exchange rates could become too strong for many emerging markets to afford. Due to the Euro’s wide accessibility, Germany offers ideal trade solutions to nations that may not be wealthy enough to trade with more powerful countries like the US.

This is also why Germany continues to support Greece. Greece is one of Germany’s biggest trade partners, buying the majority of its cars from Germany due to the smooth trade facilitated by the shared currency. This means demand for German products in Greece is extremely high.

So despite widespread speculation that Germany would be better off outside the European Union, the nation has thrived and has many reasons to remain at the heart of the EU, even if a ‘Brexit’ were to occur.

Would a ‘Brexit’ Domino Effect Really Occur?

The short answer is that a UK exit from the EU would inevitably encourage other members to reconsider their position.

As Euroscepticism rises in various European Union nations like France, Italy and Spain, other countries may be tempted to follow Britain with their own EU Referendums if a ‘Brexit’ becomes reality.

Many EU nations experience unique positions. Britain’s already Eurosceptic trade partner, Denmark, is a likely candidate with less reason to stay if the UK jumps ship. Greece however, is likely to hold onto membership unless forced out, while nations like Germany and Belgium attempt to hold the bloc together.

Other vital factors should also be taken into account. The EU has been experiencing increasing reform pressure in recent years from the rise of Euroscepticism in members, which may lead to reforms that satisfy members enough to stay. Another possibility is that Britain may struggle in independence, which would deter other nations from repeating a potential miss-step.

Regardless of the possible fallout, a ‘Brexit’ would certainly cause not just economic shockwaves, but relation shockwaves throughout the EU. Change wouldn’t just be likely, it would be near inevitable. Some hope that even if Britain chooses to ‘Remain’, the EU will motion to improve member satisfaction rather than continue to risk future fallout from rising Euroscepticism.

Category Economy

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