If Britain votes to leave the EU on 23 June, it may well represent the greatest strategic shock to the continent since the breakup of the Soviet Union and consequent reunification of Germany a quarter century ago. The balance of power and influence between Britain, France and Germany – a crucial variable in European geopolitics for hundreds of years – would shift, while the European project as a whole could be gravely weakened just as its eastern and southern flanks come under unprecedented strain. Britain itself, having found the role that Dean Acheson famously proclaimed lost, would be in danger of losing it once more, eroding its value as a transatlantic bridge, and grasping for chimerical substitutes in the Middle East and Asia.
Britain's Treasury estimates that, two years after leaving the EU, output would be 3.6% lower and the pound 12% weaker than if Britain remained in. The widely respected Institute for Fiscal Studies has argued that 'there is an overwhelming consensus...that (leaving) would reduce national income in both the short and long runs', suggesting the net effect on public finances would be £20-40 billion.
In consequence, Chancellor George Osborne has threatened a 2% cut to defence spending, which in April was triumphantly raised for the first time in six years. Brexit would therefore make it much harder for the UK to meet NATO's 2% of GDP target for defence spending, to which the Cameron Government had committed. A resource crunch would also compound the military's array of challenges, from destroyers that can't operate in the Middle East to gaps in crucial areas like maritime patrol aircraft or naval aviation. RUSI's Malcolm Chalmers has suggested that, given these circumstances, the government would need to scrap last year's Strategic Defence and Security Review (SDSR) and conduct a new one. If this were done, it would probably resemble the cuts-heavy 2010 document, which is reviled in the military as having done nearly irreparable harm. It could also cast a shadow over an imminent political debate on the renewal of nuclear submarines.
Moreover, strategy is bounded not just by resources but also bandwidth. Governments can only focus on a few things at once, not least when their ruling parties are in internal chaos. A Leave vote would spell the end of David Cameron's career, precipitating an ugly leadership struggle. It would also leave a generation-long divide within the Conservative Party between populist (Leave) and modernising (Remain) factions. [fold]
The Leave campaign has said it envisages a gradual unwinding of the UK's position in the EU, with total departure likely by the next election in 2020. Putting aside the real prospect of a second Scottish referendum, this period will be marked by market volatility, political chaos and frenetic diplomacy. Negotiation for British access to the single market – whether the model is Norway or Switzerland – will absorb almost all of the UK's political and diplomatic attention. Countering Russia in the Balkans, coaxing Libya's warring factions together, or building ties to Southeast Asia will invariably take a back seat. And if Brexit does provoke a general unravelling of the EU, several hundred years of European history has made it clear that Britain is not immune – as Lawrence Freedman has noted, 'it will make no difference whether Britain is in or out'.
Brexit will also change the EU's internal equilibrium. British departure cannot but strengthen the voice of the two remaining core European powers, France and Germany. Within the bloc, this could mean an acceleration of German-led efforts at EU (rather than NATO) defence integration, which Britain has often viewed with scepticism. EU military missions are currently underway in Bosnia-Herzegovina, Mali, Central African Republic, and in the waters of Somalia and the Mediterranean. British departure would complicate many of these operations, but they would not cease; over the longer-term, they would merely become likelier to reflect Franco-German, rather than British, priorities. Germany's de facto leadership role in Europe – which, as Germans point out, they never sought – will grow. While this in itself is no longer a major problem for Britain, as it was in the 1990s when Thatcher opposed reunification, it may exacerbate tensions within the eurozone. Berlin and Paris will gain diplomatic clout because they will have heightened influence over a bloc of half a billion people.
Over the medium to long term, this could even nudge EU policy towards Moscow. While NATO is undoubtedly the paramount military bloc in Europe, it is EU sanctions that have been the most important European instrument against Russia. But France and Germany are more economically intertwined with Russia than Britain. Last week French senators overwhelmingly passed a non-binding resolution to lift sanctions, and there are rumblings of discontent in Germany. Although Poland and the Baltics will benefit from important new NATO deployments in the east, the loss of the British voice in the EU will be concerning to those on Russia's doorstep.
Beyond Europe, a fourth consequence is that Brexit is likely to place serious stress on the UK's grand strategy, and particularly its network of alliances and partnerships. Britain outside of the councils of the EU would be a less attractive partner to Washington, particularly if British military weakness were, for the reasons outlined above, to be prolonged. At the same time, the Leave campaign has proposed that Britain can reorient itself towards, variously, the Commonwealth, the BRICS, or the so-called Anglosphere. 'Australia and Canada', argues one detailed study, 'would make natural partners on a wide range of issues from trade to global governance'. The US-Australia trade deal has also been mined for lessons.
The problem is that this is a barely coherent laundry list. The question is how the UK would handle what would be a broad and serious divergence in its economic relationships from its security ones. The most serious threats to the UK would continue to arise from the EU's borders (Russia) or within the union (terrorism), and even the most economically dynamic of these new would-be partners would offer London little in this regard. The aforementioned study (see page 17) places two countries in the high priority category for the negotiation of trade deals: Russia and China. It doesn't take a Metternich (sorry, a Palmerston) to see how problems might arise here. Economics and security cannot be quarantined from one another.
Brexit, for its proponents, is an opportunity to unshackle Britain from its decrepit European moorings, and plug in to the powerhouses of the world. The risk is that Britain is left weakened and distracted, though just as vulnerable to continental risks as it had been inside the union. With the British voice quieted, and the Union shaken, Moscow would face both easier interlocutors and a softer target. The UK's relationships to the US and NATO would remain paramount, but the tension between these bedrock alliances and the pressure of post-Brexit partnerships would tax any government, and certainly one faced with political fratricide and economic turmoil.