Brexit: A common disappointment

Thu 05 July 2018, Philippe Ropenga

As many of you might have noticed, I have not been publishing posts on Brexit at the same pace as before. There are two reasons for slowing down. The most obvious is that French law regarding successions and estates is evolving rapidly due to globalisation. It raises really interesting theoretical questions, and throws challenging issues at the practitioner who has to solve them in a cross-border context. The other reason for not publishing more posts about Brexit may seem politically incorrect. I have the impression that Brexit has been turned into a dull harmonisation process. It is not my intention to discuss the attitude of EU or British politicians in this blog post. I would like to share my feelings with you, and I am not trying to demonstrate anything. Brexit is a challenging process since its outcome is largely unpredictable. An earlier post about Brexit has drawn an analogy between it and an endless screw used to displace things. Brexit is a process designed to move the UK smoothly out of the EU.¹ It is not designed to shape a new EU, nor to restore the United Kingdom as it existed before the EU. People should have their say on the evolution of the UK and that of the EU. Brexit is a transitional process. Two issues arise (1), and there is only one cause to them (2).

1 Two issues

No one seems to be getting ready for the future (1.1). Talks focus on organisation rather tend to neglect direction (1.2)

1.1 Lack of consideration for direction

A transition should prepare the future. It however seems that no one in the UK wants to think about it. Many people seem to focus on what to do now. If one believes in democracy, the answer to this question is simple: leave. It is much easier to settle a dispute if each party knows where to go. The British have decided to leave the EU. Usually, when people have to divide family property, or when they decide to put an end to a business relationship, they start thinking about what to do next. This indeed is good practice since one focuses on moving on to achieve practical goals. Conflicts are signs that change is needed. The British have decided that change was needed. I however cannot see the British discussing the future of the UK. Most British politicians indeed talk about "hard" or "soft" Brexit. This difference between hard and soft is a matter of quantity. It can be reformulated like this: Do you want more or less EU after Brexit? It often is thought that when one complains about a nuisance, lowering its level makes it bearable and solves the issue. This however is not always useful because the party who complains focuses on the residual nuisance, still is unhappy while the party who is supposed to reduce the nuisance is frustrated. Each party will blame the other for the failure to cope with the nuisance.

The same may well happen with Brexit because the British have not voted to have less EU in the UK but for a different UK. The fact that the Withdrawal Bill has recently received Royal Assent² shows that the UK is not opposed to the EU. It is true that it now is hard to see in what direction the UK wants to go. One would expect the UK to start debating the direction to choose as it would happen in cases where a family business or a family property is at stake.

The question of direction seems to be overshadowed by that of organisation.

1.2 Overvaluation of organisation

Organisation is essential because it allows an estate or a business to create value over time. Organisation is related to maintenance. A trustee or business manager has to decide how to allocate resources, for example. The trustee has to allocate them; otherwise, the property will decay. Organisation itself however is not sufficient; the trustee has to decide what value he wants to develop. The same property may be used as a hotel or as a farm. It will not decay in any case because the trustee will look after it. Nevertheless, the value that will be developed will be different since a hotel is different to a farm. The organisation of a farm differs from that of a hotel and is closely linked to the direction given by the trustee to the management of the family property. It indeed is hard to conceive a farming estate managed exactly like a hotel. Furthermore, a family business can be well organised in the sense that it produces income that can be distributed among family members but lack of direction. If the family members do not agree on the value that has to be developed by the company, it may be difficult to pass the baton to the next generation.

As far as Brexit is concerned, many technical details have been solved by adapting existing regulations. Huge regulatory works have successfully been completed so far, and cross-border coordination regarding essential matters such as security is being discussed.³ This is extremely positive but not sufficient. These regulatory works deal only with organisation. The direction taken by Brexit remains unclear, especially regarding borders. An earlier post mentions this issue.⁴ It is easier to solve technical issues related to external security than to make a decision regarding the Irish border since making a decision about a border requires a State to determine the nature of its relationship with another State. It is a matter of direction. The same occurs with EU citizens' rights. There has been much communication around it but little progress has been made since June 2017.⁵ This is logical since making decisions regarding the rights of EU citizens requires to determine the kind of relationship that the UK wishes to enter into with other countries. I am confident that the UK will make important decisions about the direction Brexit has to take, but I a feel that these decisions will be made after Brexit. The UK actually seems too busy building regulatory frameworks on time for Brexit to reflect upon its future without the EU. If I am right, Brexiteers and anti-Brexit voters both are unhappy about this situation.

Brexit will be disappointing because this transitional process is not used to consider the direction that the UK has to take after Brexit. It will also be disappointing since it will not address the main difficulty, i. e., the lack of a clear political project for the EU. Let us now identify the cause of this difficulty.

2 One cause

The two symptoms analysed above are caused by the EU rationality (2.1). Hence, the EU needs to change (2.2).

2.1 The EU rationality

Some may think that the EU does not function well because of its size. Many eurosceptics indeed think that the UE is now too large to be effectively managed. Furthermore, it also is a common opinion that Western countries share a common way of life that people from Central and Eastern Europe refuse to adopt. Brexit and recent elections in European countries do not support this analysis. Brexit indeed has happened in the UK, and recent election results have shown that people from Western Europe are more inclined to vote for anti-EU parties now than ever before. It therefore is useless to blame the enlargement of the EU. The main issue with the EU is its rationality. The EU has institutions that function despite current turbulences to promote social welfare. It does so rationally, by ensuring a deeper market integration. The heads of the EU member States are «…RESOLVED to ensure the economic and social progress of their States by common action to eliminate the barriers which divide Europe,

AFFIRMING as the essential objective of their efforts the constant improvements of the living and working conditions of their peoples…»⁶ The easiest way to eliminate barriers is to turn Europe into a standardised area. This process relies on economy. It makes sense since social welfare is closely related to economy. Building a regulatory framework designed to promote social welfare is an impressive task when it aims to benefit millions of people. No one can complain if a government manages to eradicate unemployment. Rationality is a quality. Nevertheless, rationalisation implies to leave non-rational aspects of life aside. It may seem an unbearable effort during an economic crisis. What seems to be an economic barrier can be perceived as a cultural enclosure that enables one to feel at home. Nationality, for instance, introduces differences between people since some people are nationals of a given country while others are aliens⁷. Furthermore, the will to ensure market integration tends to have psychedelic effects. A recent EU regulation regarding successions provides that if one wishes to prepare his succession by opting for a law, one can only opt for the law of nationality. The option for the law of nationality can raise difficulties if one feels bound by a tight link to a country that is not one's country of nationality. As one can see, nationality is being pushed aside by EU law since it hinders economic rationalisation and it sometimes comes forcefully back like a boomerang that hits the hunter who is not cautious enough.⁸.

The EU rationality may be efficient from the point of view of economy. It however neglects human aspirations that are not closely related to economy. Hence, the EU needs to change.

2.2 The need for change

The EU has been conceived during a period of impressive growth. One could then think that the most important was to foster prosperity by eliminating any obstacle that might have slowed it down. People now live in an open world and one can see that eliminating these barriers does not necessarily support prosperity. Rising opposition to globalisation may be seen as an irrational reaction to the instability of today's world. The fact is that a person may sacrifice himself for a child, a lady, or a land, but will not make any effort for better regulation or deeper market integration. Hence, it would be reasonable to imagine a Europe that is not focused on economic growth.

The EU institutions follow a rational process mainly to pursue economic growth. It would be reasonable in these unstable times to take other aspirations into account, even if they are loosely⁹ related to economy.

In brief, Brexit is a transitional process that mainly deals with the organisation of cross-border relationships. One should therefore not be afraid of it. One should rather fear that EU citizens could be bored with the EU before the end of this transitional process.

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