Can the EU and U.K. survive a breakup?

Executive Summary

The United Kingdom’s vote to leave the European Union is the worst setback Europe’s leaders have suffered during more than half a century of painstaking efforts to bind that continent together economically and politically. It was wholly unforeseen and ran counter to the bulk of expert advice, which warned that a British exit would badly hurt the U.K. economy. But foes of the EU dismissed the warnings as overblown, argued that “Brexit” is essential to regain control of immigration and said the U.K. can compensate for a loss of trade with Europe by negotiating deals with other parts of the world. As the new government of Prime Minister Theresa May ponders what to do in the aftermath of the Brexit vote, leaders across Europe are wrestling with their own crisis—how to hold the Union together and protect the continent’s fragile economy. Among the issues under debate: Can the EU survive without Britain? Will the U.K. prosper outside the European Union? Can London retain its place as a global financial center?

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Connolly, Bernard, “The Rotten Heart of Europe: the Dirty War for Europe’s Money,” Faber & Faber, 1995. A senior economist for the European Commission was sacked for writing what became the classic insider exposé about the drawbacks of the common currency.

Hannan, Daniel, “A Doomed Marriage: Why Britain Should Leave the EU,” Notting Hill Editions, 2012. A Conservative member of the European Parliament, who is an articulate and thoughtful opponent of the European Union, argues that the entire edifice should be dismantled.

Judt, Tony, “Postwar: A History of Europe Since 1945,” Heinemann, 2005. A British historian provides a wide-ranging account of postwar Europe that recounts the formation of the European Union in easily comprehensible language.

Young, Hugo, “This Blessed Plot: Britain and Europe from Churchill to Blair,” Macmillan, 1998. A history of Great Britain’s relationship with the rest of Europe by a journalist from the generations of Britons who enthused over the EU as a means to bring peace to the continent.


“Britain’s New Prime Minister: May Time,” The Economist, July 16, 2016, An analysis of the incoming government’s options, summarized as “soft Brexit” or “hard Brexit.”

Davis, David, “May’s new chief Europe negotiator David Davis lays out plans to take us out of EU,” The Sun, July 15, 2016, The Cabinet minister in charge of Brexit negotiations sets out why he believes the U.K. is in a strong negotiating position.

Johnson, Boris, “I cannot stress too much that Britain is part of Europe – and always will be,” The Daily Telegraph, June 26, 2016, The Brexit leader and future foreign secretary asserts that a post-Brexit U.K. could have the advantages of the single market without permitting free movement of labor.

Partington, Richard, and John Glover, “Brexit May Cut Investment Banks’ Revenue by $8 Billion, BCG Says,” Bloomberg News, July 15, 2016, An assessment of Brexit’s impact on the global investment banking industry by Boston Consulting Group.

Reports and Studies

“The Economic and Financial Costs and Benefits of the EU’s UK membership,” House of Commons Treasury Committee, May 2016, A detailed and generally evenhanded report—published a month before the vote and therefore one of the best guides to the problems ahead—by a committee consisting of supporters and opponents of Brexit.

“The Economic Consequences of Brexit: a Taxing Decision,” Organisation for Economic Co-operation and Development, April 2016, The international body, in which 39 countries that control 80 percent of world trade cooperate in dealing with globalization and related issues, warns that “Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy.”

“European Union Finances,” Her Majesty’s Treasury, 2015, This is the most authoritative source for information on how much the U.K. contributes to the EU budget and how much is returned as a rebate or in regional grants and subsidies.

“HM Treasury analysis: the immediate economic impact of leaving the EU,” Her Majesty’s Government, May 2016, The U.K. Treasury issues a dire warning about the consequences of Brexit.

“HM Treasury analysis: the long-term economic impact of EU membership and the alternatives,” Her Majesty’s Government, April 2016, This was the British government’s authoritative warning against voting Brexit, with predictions of dire economic consequences.

“Top 100 EU rules cost Britain $33.3bn,” Open Europe, March 2015, A report by a think tank seeking EU reforms produces the source to which Brexit campaigners refer when arguing that freeing U.K. businesses from EU regulations would produce big dividends. The paper is more factual and carefully argued than some of the statements that have drawn on it.

“Uncertainty Clouds the United Kingdom’s Economic Prospects,” IMF Survey, International Monetary Fund, June 17, 2016, The IMF warns that the economic and financial impact of Brexit on the U.K. will be “substantial.”

Dartmouth, William, “Inconvenient Truths about UK Trade and the EU,” Institute for Direct Democracy in Europe, 2016, The 10th Earl of Dartmouth, a member of the European Parliament from the U.K. Independence Party, argues that EU regulations harm the British economy; the paper has useful statistical tables.

The Next Step

European Migrant Crisis

Parfitt, Tom, “Theresa May WILL slash EU migrant numbers after Brexit, Tory chairman vows,” Daily Express, July 24, 2016, New U.K. Prime Minister Theresa May is committed to cutting the number of migrants allowed in Britain after it withdraws from the European Union, Britain’s Conservative Party chairman says.

Shackle, Samira, “Brexit fallout: Anti-migrant attacks surge in the UK,” Al Jazeera, July 25, 2016, Hate crimes are up 57 percent since Brexit, and human rights advocates and British immigrants blame anti-immigrant sentiment linked to the Leave campaign’s use of scare tactics on migration to gain support.

Szakacs, Gergely, “Hungary’s migrant referendum shows Europe’s post-Brexit challenge,” Reuters, July 1, 2016, In the wake of the Brexit vote, Hungary’s leader Viktor Orban is going toe-to-toe with the EU Commission over its plan to resettle refugees across member states based on quotas.

EU Changes

Chazan, David, “Jean-Claude Juncker admits Brexit talks cannot begin in months as there is ‘no deadline’ for Britain to invoke Article 50,” The Telegraph, July 25, 2016, The European Commission president acknowledges Britain’s need for time in negotiating its departure from the EU.

McAuley, James, “With Britain’s exit from the European Union, France sees an opening,” The Washington Post, July 18, 2016, The French political mainstream sees Brexit as an opportunity to increase France’s influence in Europe.

Taylor, Paul, “EU authority fraying in reaction to Brexit vote,” Reuters, July 5, 2016, The European Union has begun to face vocal opposition in many member states, with leaders questioning the EU’s Brussels-based bureaucracy and its policies.

Free Trade Questions

“North American leaders defend free trade amid Brexit, Trump,” Chicago Tribune, June 29, 2016, President Obama denounces isolationist politics and the exploitation of immigration fears by pro-Brexit campaigners and GOP presidential nominee Donald J. Trump.

Murphy, Joe, “Brexit: Free trade with the EU is now ‘pie in the sky,’ Theresa May is told,” Evening Standard, July 21, 2016, Pascal Lamy, former head of the World Trade Organization, calls expectations of a British free trade deal with Europe unrealistic.

Global Economy

“Brexit heightens uncertainty in global economy, says G20,” The Guardian, July 24, 2016, Finance leaders from the international G-20 forum highlighted the risks Brexit poses to the world economy and advised the U.K. to reduce conflict by remaining close to the EU.

Finch, Gavin, “Banks Face Brexit Bill of $66,000 Per U.K. Employee Moved Abroad,” Bloomberg, July 25, 2016, A consulting firm estimates that banks wanting to leave the U.K. to maintain access to the EU will have to spend $66,000 per employee to move them abroad.

Matthews, Chris, “IMF Say Brexit Will Batter the Global Economy,” Fortune, July 20, 2016, The International Monetary Fund warns of the uncertainty in the U.K. following Brexit and predicts Britain’s economy will slow in the coming year.


Centre for European Reform
14 Great College St., Westminster, London, SW1P 3RX
+44 (0) 20 7233 1199
A think tank “devoted to making the EU work better, and strengthening its role in the world. We are pro-European but not uncritical.”

European Commission
Rue de la Loi, 200 -1049, Brussels
00800 67 89 10 11
The head offices where staff employed by the European Union are based. For inquiries, it’s best to use the Web address.

European Commission (London office)
32 Smith Square, London, SW1P 3EU
+44 20 7973 1992
The office that coordinates EU activity in the U.K., and will continue to function until Brexit is complete.

Open Europe
7 Tufton St., London, SW1P 3QN
+44 20 7197 2333
An influential “Euroskeptic” or anti-EU think tank that describes itself as “the go-to source for real-time analysis on breaking European affairs, delivered by our experts as events unfold.”

Policy Network
3rd Floor, 11 Tufton St., London, SW1P 3QB
+44 20 7340 2200
A “center-left,” pro-EU think tank whose purpose is to promote and develop social democractic politics across Europe.

U.K. Department for Exiting the European Union
A new government department, responsible for handling the Brexit negotiations. Its address and contact numbers will be posted on its website when the department has been set up.

U.K. Department for International Trade
Another new government department, responsible for negotiating the trade agreements that the U.K. will sign when it has left the European Union. Its address and contact numbers will be posted on its website when the department has been set up.

DOI: 10.1177/237455680216.n1