In 2016, the United Kingdom made the momentous decision to leave the European Union, Donald Trump was elected President of the United States, and many European countries continued to struggle with internal challenges. The E.U. feels less stable than at any point in my lifetime.
There are common forces that brought us to this dangerous place, and it is more important than ever that the developed democracies come together to address them. Sadly, the opposite is happening. Just when the West needs alignment among the U.S., the U.K., and the E.U., national politics are pulling it apart.
Within Europe, there are three major challenges. The first is Brexit, the biggest event in British politics in a generation. Many think that withdrawal from the E.U. is a mistake; but it is what more than half of those who voted decided, so now we have to implement it. It won’t be easy. Translating the vote into policy will be like defusing a bomb: determining which wires to cut will require great care.
If Prime Minister Theresa May’s government focuses on what really matters in the upcoming negotiations with the E.U., we can be guardedly optimistic that it will return with a good deal. Europe has a clear economic interest in keeping the U.K. close, and it needs the U.K.’s diplomatic, military, and intelligence capabilities. The U.K. also has a strong relationship with the U.S., and will remain an important part of the transatlantic security axis.
Meanwhile, we Britons should acknowledge that many E.U. laws and regulations have become our own, and that we share many common goals and joint programs. We need not change all of these, nor should we discount the value of having access to the E.U. single market. Europe is the largest economic bloc in the world by some measures, and it is a significant source of investment in the U.K.
The distinction between a “hard” or “soft” Brexit misses the point. The negotiations will be so complex that certain outcomes are bound to be soft, while others will be hard. The U.K. may be able to pay a price for access to the single market, “passporting” for financial services, or control over immigration from the E.U.
The second big challenge within Europe is weak economic growth and competitiveness. Growth in European economies is lower than in the U.S. and most Asian countries, energy costs are twice those of the U.S., and labor costs are twice those of Asia. E.U. countries urgently need to deregulate their markets and make their industries more competitive, which the U.K. has long advocated.
The third challenge for Europe is social inequality. A quarter of young people in Spain, Portugal, and Greece are unemployed, and many people sense that the rewards of prosperity are not being fairly distributed. While globalization has been good for the world overall, it has left many people behind. These people are now making their voices heard at the ballot box, and we need to listen to them, and respond to their concerns.
Indeed, social inequality is even worse in the U.S. than in Europe. Many Rust Belt households’ incomes haven’t risen for 30 years, and many of those households helped elect a president who has promised to turn the country inward.