India’s path to prosperity: Book talk with Raghuram Rajan on ‘Breaking the Mold’


India’s path to prosperity: Book talk with Raghuram Rajan on ‘Breaking the Mold’


Two British leaders present cases for and against Britain leaving the European Union (Brexit)

On June 23, voters in the United Kingdom will vote in a referendum on their country’s membership in the European Union. A British exit—or “Brexit”—from the EU would have significant political, economic, and institutional implications both within and outside Britain. In an event Friday hosted by the Center on the United States and Europe (CUSE) at Brookings, in cooperation with the Heinrich Böll Stiftung North America, the UK in a Changing Europe Initiative based at King’s College London, and Wilton Park USA, former officials and academics assessed the range of issues that could result from the outcome of the referendum.

The first panel of the multi-panel event featured the cases for and against the United Kingdom remaining in the European Union. Moderated by Constanze Stelzenmüller, who is the Robert Bosch Senior Fellow at Brookings, Douglas Alexander—a former U.K. shadow foreign secretary and now at Harvard’s Kennedy School of Government—advocated the “stay” position. He opened his remarks by stating that “While the choice is for the United Kingdom, the consequences of the choice that we make on the 23rd of June will be felt far beyond Britain’s shores.”

Representing the “leave” position was businessman John Longworth, former director general of the British Chambers of Commerce and now chairman of the Vote Leave Business Council. “I had always held the view that the best place for the UK to be is in a reformed European Union,” Longworth said, “but I have also always been a healthy Eurosceptic … and I came to the conclusion that the European Union is incapable of meaningful reform as I would see it.”

A summary of their arguments and video from our Facebook Live broadcast are presented below.

Douglas Alexander: Stay in EU John Longworth: Leave EU

“I would suggest,” Alexander said, “that this is a really big deal geopolitically not just for Britain but also for Europe and indeed for the West, for America’s relationship with Europe.”

External reasons against leaving

  • Britain leaving the EU will change the balance of power in Europe “in favor of a more protectionist Europe if Britain were to choose to leave.”
  • Europe without Britain would be “poorer, smaller, and less influential.” Britain represents 14.8 percent of the European economy, 12.5 percent of its population, and holds a permanent seat on the UN Security Council.
  • A decision to leave would lead to “a very real risk of contagion.”
  • Britain as part of the EU can better meet the big challenges we face, such as climate change and the threat of terrorism.

Internal reasons against leaving

  • A Brexit would mean “immediate political instability”—with a new Conservative party prime minister.
  • Constitutional instability, especially with regard to Scottish independence. The difficulties with the three nationalist arguments “have got worse, not better, in the last 18 months.”
  • There would be “deep uncertainty as to Britain’s relationship with Europe,” especially as regards negotiations for exit, renegotiation of relationships with the EU, and replicating hundreds of regional and free trade agreements.

Alexander added that “even in Britain … [there is] deep uncertainty associated with the choice to leave the European Union; not only in relation to the journey, but also in relation to the destination.”

“Europe is a fundamentally undemocratic, corrupt, and corrupting organization,” Longworth said and its bureaucracy “fails to take account of the democratic rights of people.”

Economic and trade misunderstandings

  • Only 13.3 percent of the UK’s economy is associated with exports to Europe.
  • The 87 percent of the economy  not associated with exports to the EU “is burdened by … £125 billion a year of costs that European regulation incurs upon the UK economy.”
  • The UK “pays £350 million a week to the EU machine,” half of which it gets back “in projects that we probably don’t want in the first place, top sliced for European administration, and wrapped up in red tape.”
  • If Britain were to leave, the 13 percent of the economy concerned with exports to the EU would have a “marginal” impact on UK economic activity.

Economic arguments for leaving

  • Tariffs are already low.
  • The UK could remove tariffs to the rest of the world.
  • European countries with trade surpluses with Britain would negotiate trade deals.
  • The UK would be able to maintain many trade deals already negotiated by the EU on its behalf.
  • The UK would be able to “swiftly negotiate trade deals elsewhere.”

“All in all,” Longworth said, “the domestic and rest of the world exports to the UK, and the ability to negotiate better deals, will actually make the UK economy better outside the European Union than in the European Union.”

Watch their full remarks here, from our Facebook Live broadcast:

Alexander also praised President Obama’s recent visit to the United Kingdom and his remarks in support of Britain staying in the European Union. What President Obama did, Alexander argued, was, “in a very carefully constructed and sincerely held intervention”:

explode the post-imperial fantasy that Britain somehow would stand taller in Washington, or frankly in Moscow or Beijing, outside of the European Union. And he rather deftly, I felt, answered the claim by the exit side of the argument that there is an Anglosphere alternative to the European Union. He said, listen, if the claim is that we will instantly in the United Kingdom would see a free trade agreement with the US, or with Canada, or with Australia, or with New Zealand, isn’t it reasonable for the president of the United States to explain what the position of the U.S. government would be? And he said very clearly, echoing the words of Mike Froman the USTR, that Britain would go to the back of the queue, relative to the priority of doing a deal with almost … 440 million or so consumers in the European Union.

Longworth offered the opposite view of President Obama’s intervention, calling the president’s remarks “arrogant” and “lecturing.” He also criticized the UK government for a campaign of “talking Britain down”:

I thought it was disgraceful that we were facing a position where our own government, rather than presenting both sides of the case and the facts to the British people, had decided to reduce itself to a campaigning organization and run our own country down. And in fact gone they have gone beyond that now to inviting foreign leaders to do it on its behalf. It was a ludicrous position. The leave campaign’s view, and the thing I wanted to be associated with, was an optimistic view of the UK outside the European Union and in the world, in a globalized world.  Because increasingly that’s where trade and relations should be heading.

“While the choice is for the United Kingdom, the consequences of the choice that we make on the 23rd of June will be felt far beyond Britain’s shores,” Alexander noted.

“Britain has been a great ally of the United States, along with other old Commonwealth nations since the Second World War, and will continue to be so,” Longworth concluded. “There’s a great fondness in the UK for the United States.”

The event also included a panel on the legal, political, and foreign policy factors shaping the referendum debate; and a third panel on the international economic and financial implications of Brexit. Visit the event’s web page to get full audio of all the panels.