Brexit and institutional change: what will the EU and Britain do?

By Thomas Meijer

On the 27th of June Great Britain will decide whether it stays in the European Union in a referendum. This can have major effects on Britain and the EU’s economies, politics and international relations, but also on the institutions in both and their future development. You could argue that the EU and Britain have arrived at a critical juncture, as a number of options are open to a limited amount of actors, which in turn could determine on what path Britain and the EU are set.                                                                                                  

The Global Council describes five possible options that Britain has if it would exit the EU, in which case certain institutions, such as the rules that allow for a single market and the authority of the European Court of Justice, would radically change for BritainOther options are currently being explored by David Cameron, who has struck a deal on a reform package that puts certain limits on the EU’s authority over Britain. The deal could be seen as a combination of layering, by giving every member state a ‘red-card’ which allows new ways of blocking EU legislation, and the establishment of an ‘emergency handbrake’ that allows Britain to delay paying benefits and cut existing child-benefits for migrants. It could also be seen as changing the level of enforcement, as Britain now no longer strives for an ‘ever closer union’.                       

If Britain were to exit, they would have to overcome the obstacles created by coordination problems and veto point both at once in the upcoming referendum. Asset specificity and positive feedback present other major obstacles in moving towards a Brexit, especially in the business sector, as Britain has access to the EU’s single market and all its trade agreements. Some suggest a Brexit might set the EU on a path of more integration, while others think EU-skeptical behavior will spread contagiously to other members. This could possibly create a tipping point against the EU.