No issue in peacetime has preoccupied the Irish elite and public to the same extent as the United Kingdom’s renegotiation, referendum and vote to withdraw from the European Union.

Although the Irish Republic’s accession to the then European Economic Community helped it move away from its dependence on the UK, the two countries have maintained close economic, social and political relations. They have also cooperated on many issues relating to the Northern Ireland peace process. The Common Travel Area that Ireland and the UK share – which allows for free movement and establishment across Ireland, the UK and some UK dependencies – has existed for nearly a century. The frictionless borders that came about as a consequence of the end of the Northern Ireland conflict, as well as joint membership of the EU and its customs union, have contributed to turning the islands that the United Kingdom and the Irish Republic share into an inextricably linked social space, ensuring that the two countries’ present and futures are entwined. The result is that the two countries share far more convergent interests than divergent ones.

It should come as little surprise, then, that the prospect of the UK’s renegotiations, and David Cameron’s ill-fated promise of a high-risk referendum on EU membership, was not warmly received in Dublin. Indeed, Irish policy makers recognized early on that both of these developments had the potential to fundamentally alter the nature of the bilateral relationship. Neither was seen as conducive to the furthering of mutual interests. Although the issue did not truly enter the public consciousness until the referendum campaign in 2016, the UK’s EU membership renegotiation and the potential for withdrawal were taken seriously by policy makers and analysts from the very beginning.

BACKGROUND

To understand why Brexit carries such importance in Ireland, it is necessary to briefly examine British–Irish relations in the EU context.

On 1 January 1973, fifty years after gaining independence, Ireland became a member of the EEC in the company of the UK and Denmark. The decision to join had been less an ideological conviction, however, and more an exercise in realpolitik: if the UK chose to join the EEC then Ireland had no option but to follow suit.

The Panic of 1907 was the economic shock that sent waves of banking reform throughout the country. It was responsible for American politicians and Wall Street bankers beginning to work together to find solutions to the rigid American monetary system. The 1910 meeting on Jekyll Island, the Aldrich Bill of 1911, and the Aldrich–Vreeland Emergency Currency Act of 1908, and the Federal Reserve Act were all responses to the Panic and its fallout. “Central” and “Banking” were two dirty words before 1907. But, the Panic changed that forever.

The commonly known story of the Panic is that in October 1907 an attempt by an overzealous Wall Street banker to corner the copper market led to a run on many major banks. The effects of the run caused a panic that reverberated throughout Wall Street and the rest of the US banking and manufacturing industries. At the height of the Panic, J. P. Morgan stepped in to aid the banking community and quell the massive drop in bank reserves and avert market collapse. He was touted as a true patriot and selfless beacon of financial hope for the country.

Compared to the panics of 1837, 1857, 1873 and 1893, the Panic of 1907 was by far the most volatile. The major companies that were affected included Amalgamated Copper, US Steel, and the railroads of New York Central, Pennsylvania, Reading, Southern Pacific and Union Pacific. The market began to drop ten months before the actual panic, with tremendous stock disposals throughout the span of January to October 1907. From 18 February to 14 March, the market dropped 29 points. In March, Secretary of the Treasury George B. Cortelyou provided a stimulus of $71 million after the first large drop in the market. The New York bankers were expecting much more, so they were unable to hold off the second hit that occurred in August because of the mass buying of low-priced securities in March and the subsequent short sales over the summer. The fall of 17 points that followed from 29 July to 15 August hurt even more because the securities that were purchased low in March were now even more undervalued.

Historians often argue about what single civilizing occurrence had the most impact upon the history that succeeded it. The invention of the plow in ancient Egypt comes to mind. Or, it could be argued that the printing press was the largest historical game-changer. In terms of industry, the Sumerian ziggurat must be on the list, or for societal order, Hammurabi’s Code, which first systematized the law in ancient Babylon. In the modern era, the invention of the home computer must be in the conversation, as well as the smart phone, perhaps.

However, there is one historical event, which to an economic historian can be argued as the most impactful on all of human kind. Everything else pales in comparison to the change brought about in the social, legal, cultural, military, labour, gender, and any other compartment of the historical landscape by one single innovation: the invention of money. Money is the greatest civilizing factor in history, and its existence remains the cornerstone of all power throughout history. Without money, nothing is possible, and for those who have most of it, anything is possible.

Before currency, the barter system was the means for purchasing goods and services. We would trade things like wheat and wood, goats and oxen, for other things like pottery and jewellery, oats and daughters. But the problem with many of the things we would trade like wheat, oats, oxen, and even daughters is the fact that they all die. Goods and services were greatly limited by the fact that they did not last long. The wealth of an individual could not be measured by his ownership of goods or his ability to produce. Even property was subject to the weather, the elements, and population adjustments.

Then, around 1100 BCE, in the era of the Palestinian civilization, a society of people in modern-day central and western Turkey, changed history forever. The ancient Lydians perfected the metallurgy of gold, silver, copper and bronze and became the first to mint coins from these metals and to create the first uniform accounting and record keeping system for the purposes of disseminating currency.

INTRODUCTION

Belgium, the Netherlands and Luxembourg share a common history of close ties to Britain and pioneering European integration. All three governments went into exile in Britain during the Second World War. It was in London that they sowed the first seeds of European integration, by signing the Benelux monetary agreement of 21 October 1943. A Customs Convention followed in 1944, leading to the creation of the Benelux Union. Later, all three states became founding members of the European Economic Community.

Geographic proximity has meant that the Benelux countries share close political, economic and military links to the United Kingdom. Despite these commonalities, their perspectives on the UK and Europe differ. The Netherlands has a strong Atlanticist tradition and limited appetite for European federalism and is sceptical about Franco-German dominance in Europe. Luxembourg has a continental mindset, however, and favours deeper EU integration. Belgium stands somewhere in between, while also facing a complex domestic political landscape. The level to which Eurosceptic movements play a role in domestic politics also differs among the three.

With sizable financial sectors and large trade and investment flows between Britain and the Benelux countries, there is a lot at stake during the Brexit negotiations. The three countries are among the most exposed to trade disruption from a “hard Brexit”, but they may also attract new post-Brexit business. Politically, Brexit has raised different questions in Brussels, Luxembourg and The Hague about the direction of Europe and European Union reform.

This chapter looks at the way in which the three Benelux countries have approached the British renegotiation, the subsequent referendum debate and the run-up to the Brexit negotiations. Each country section is structured in the same way, exploring the three phases mentioned above. A conclusion follows, outlining commonalities and differences in how they approach Britain’s departure from the EU.

THE NETHERLANDS

“Brexit has created a shockwave, and we don’t yet know exactly what the consequences will be,” Mark Rutte, the prime minister of the Netherlands, declared in response to Britain’s vote to leave the EU (Rutte 2016). The Dutch government was unequivocal: Brexit is bad for business, bad for European politics and bad for the position of the Netherlands in the EU.

To understand Brexit requires not only an analysis of the result of the 23 June 2016 referendum or of the politics of the United Kingdom. We also need to look at how the other 27 member states and European Union institutions responded to it. UK–EU relations are, like any relationship, a two-way thing. By looking at how the rest of the EU responded to the renegotiation, the referendum campaign and its result we can gain a fuller appreciation of Brexit. As this book has shown, Brexit can be set against longer-term trends in EU–UK relations and has been shaped by, and in turn shaped, the national politics of 27 other member states and those of the EU’s institutions. The book has also shown how Brexit fits into a series of changes shaping the EU, Europe and, in turn, the UK.

This concluding chapter gives a brief overview in three sections of some of the key points from the book. It begins with an overview of how the rest of the EU have viewed EU–UK relations historically, before looking at the more recent developments of the renegotiation, referendum and reaction to the vote to leave, up to the triggering of Article 50. The second section looks at five themes notable throughout the book: the impact of the Brexit debate on populism and Euroscepticism; economic calculations; the importance of the UK; how significant a crisis Brexit is to the EU; and, finally, what lessons the rest of the EU have drawn from Brexit. The final section looks to Europe’s post-Brexit future, touching on debates that are ongoing as this book goes to press. Based on the analysis of how the EU responded to the renegotiation, referendum and result, what options are on the table for the future of EU–UK relations? Based on these recent events, what are the prospects for negotiating a new relationship? Finally, and most importantly from the perspective of the rest of the EU, how will Brexit play into reshaping the remaining EU as it moves forward?

INTRODUCTION

While the Nordic countries share many similarities, there are also significant differences between them. These similarities and differences are also present in the field of foreign policy, including in their relationships with the European Union and the United Kingdom. Denmark and Sweden took part in the creation of EFTA with the UK and others in 1960, whereas Finland became an associate member of EFTA in 1961 and a full member in 1986. Denmark followed the UK closely in its attempts to become a member of the EEC in the 1960s and became a member with, and because of, the UK in 1973. The UK’s rapprochement with the EEC from the 1960s played into the debate about membership in Sweden, but the Swedish government decided against an application for membership as this was seen as incompatible with Sweden’s status as a non-aligned state. In Finland, the EEC membership debate started in earnest only after Sweden announced its intention to apply for membership. The Finnish and Swedish memberships of the EU in 1995 were closely linked to their redefinition of non-alignment after the Cold War and were not in any direct way related to the position of the UK.

As militarily non-aligned states, Finland and Sweden are not members of NATO. Denmark, on the contrary, has been a member of NATO since 1949 and has worked with the UK in multilateral military operations; during the lengthy military operations in Afghanistan and Iraq, Danish forces cooperated closely with the British. Finland and Sweden have taken part in NATO operations as partnership countries, and both have recently taken steps to intensify their cooperation with NATO.

The three countries also have different statuses within the EU. Finland, often said to be the most pro-integrationist of the three, is the only Nordic country to have adopted the euro. Denmark, in contrast, has opt-outs in four areas: European citizenship, defence, cooperation in justice and home affairs and the third stage of EMU, therefore not participating in the euro. Sweden does not have a formal opt-out but, as a result of a referendum in 2003, does not participate in the euro either.

INTRODUCTION

Spain and Portugal are both strongly pro-European countries. After decades of relative isolation and socio-economic backwardness under authoritarian rule, in 1986 they simultaneously joined the then European Economic Community as a way to support their democratization, modernization and international reorientation (see Royo & Manuel 2003). Since their “return to Europe” the two countries have been committed EU members, both being part of the Schengen area and Eurozone as well as supporting advances in foreign and security cooperation. Located on the southern fringe of Europe, with less developed economies than their northern partners but with rich national histories that give them special ties to many countries around the world, the two Iberian neighbours have often held similar views and worked closely together within the European Union, particularly for greater social and economic cohesion, as well as for stronger relations with countries around the Mediterranean and in Latin America.

Madrid has embraced deeper European integration in a more determined way than Lisbon, however, particularly on security and defence matters. While Spain has tended to be closer to a more Europeanist line as seen in countries such as Germany and France, Portugal has shown more affinities with the Atlanticist leanings of the Netherlands or the United Kingdom. Greater Atlanticism has been a way for Portugal to try and differentiate itself from its bigger and only neighbour as well as balancing more continentalist perspectives in Europe in general (see Algieri & Regelsberger, 1996; Rodrigues & Perez 2011).

Both countries also have important socio-economic links with the UK, especially in trade, migration and tourism. While Portugal has historical ties of friendship with Britain, however, based on a centuries-old alliance that is now mostly symbolic but still valued, Madrid and London have kept a relatively low-profile diplomatic relationship, in part a result of the deep-rooted dispute over Gibraltar. It is against this backdrop that Spain and Portugal approached Britain’s renegotiation, referendum and vote to leave the EU.

SPAIN

The debate in Spain about the UK’s departure from the EU must be viewed against the backdrop of two factors: first, the severe economic crisis that began in 2008 and took a toll on the lives of Spaniards; and, second, the inward-looking attitude towards EU decision making adopted in recent years by Spain’s government.

In researching the founders of the Federal Reserve I found no lizard alien races or satanic cults. I found men – men who conspired to form a central bank large enough and powerful enough to rule the world’s financial markets, and at the same time, control the entire monetary system of the United States from their Wall Street offices. I found collusion with other countries to do so, and I found ultimate economic power in the hands of a few, who with empty promises and political support became the original “masters of the universe”, free to do as they pleased with the knowledge that the largest monetary safety net in the world would save them from their recklessness and inimical greed.

A conspiracy is merely a hidden or secret plan, usually to do harm, so why does the term “conspiracy theory” have a connotation that those who believe it must be dim-witted, gullible, or crazy? Perhaps it is because some conspiracy theorists are those things and more. Or maybe it’s because it is easier for those who conspire to brand those who see them for who they are, as crazy or moronic. Perhaps those in authority accuse their accusers because they can. They sit in high offices, behind thick walls, and laugh at those who question their motives, their practices, and their authority. In the end, the people must choose for themselves who to believe, and it is much easier, more convenient, and much more comforting to believe that those in charge are doing the right thing, and those who question them are crazy, stupid, or most popular these days – un-American.

In 1961 a Yale University psychologist named Stanley Milgram began an experiment. Basically, the experiment consisted of regular people in a room with people who they thought were being “tested” in an adjoining room. Very important men in lab coats asked questions of the people being tested, and if they got a question wrong it was up to the unwitting participant to send an electric shock to the person who answered the question wrong.

Britain’s vote on 23 June 2016 to leave the European Union came as a shock not only to many in the United Kingdom but also to many across the rest of the European Union. It was the first time that a member state had voted to withdraw from a Union that, since its emergence in the 1950s, had grown to encompass most of Europe and so become the continent’s predominant organization for economics, politics, social matters and non-traditional security (NATO remaining the key organization for defence). In the rush to analyse the meaning of the referendum result, the focus has been largely on the UK. Numerous studies and books have outlined the causes, consequences and meaning of Brexit for the UK. This book looks at the constituency it is leaving, and at how the rest of the EU has responded to Brexit. In particular, it analyses how the remaining 27 member states and EU institutions faced the UK’s attempted renegotiation of its membership terms, and its referendum campaign, and how they came to terms with the result and prepared for the formal Brexit negotiations triggered by Article 50, the section of the EU’s treaties that sets out how a member state can withdraw. It, therefore, covers the 21-month period from June 2015, when David Cameron informed the European Council that his newly elected government would seek a renegotiated relationship, through to March 2017, when Cameron’s successor as UK prime minister, Theresa May, informed Council president Donald Tusk that the UK was triggering Article 50. In reflecting on this period, the contributions also dwell on the history of UK–EU relations and give some hints as to how the rest of the EU has approached Brexit since March 2017.

The EU’s sheer size and diversity has meant that most analysis of the EU’s approach to Brexit to date has fallen back on offering a pan-EU view from Brussels, a focus on the big states such as Germany or France or a select sampling of certain member states, due to the consequences that Brexit holds for them – the most obvious case here being Ireland.

EU–UK Relations in Numbers

Born 13 June 1867 in Troy, Pennsylvania, Henry Pomeroy Davison was the righthand to both J. P. Morgan and J. P. Morgan, Jr. He often spoke for the two men and represented the firm in business and political matters. The House of Morgan owned J. P. Morgan & Co., but Henry P. Davison became the bricks and mortar that held the House together.

His father, George Bennett Davison sold farm equipment and invented ways to improve the products he sold. He was on the road for most of Henry’s life, having little contact with his family. Henry’s mother, Henrietta Bliss Pomeroy was very musically inclined as a singer and pianist. She was warm and charming and very well thought of by her family and friends. Her death, when Henry was nine years old, affected the family in many ways.

After his mother’s death Henry was sent to live with his uncle Merrick Pomeroy, a Presbyterian preacher. Merrick was very strict and impressed an ideology of blind obedience of Christianity on Henry (or “Harry” as he was known as a boy). Henry’s older brother and two younger sisters were sent to live with aunts and uncles as well. Inter-marriage was a part of the Davison and Pomeroy family at this time. Two of Harry’s aunts on his father’s side married two of his mother’s half-brothers. Of all the Davison-Pomeroy family members, Merrick was the toughest, yet offered sagacious advice. Harry was well liked but did not do well in school. When his grades began to suffer greatly, uncle Merrick took him to watch a team of men digging a gutter. He said to Harry, “Those men have had none of the advantages of education and, you see, their life is hard; study, my boy, so that your lot may be a different one.” Despite uncle Merrick’s wisdom, his harsh treatment was too much for Harry. After a year with his uncle, he asked his grandmother, Lucinda if he could live with her.

On 14 June 1917 President Wilson explained America’s need to defend itself as it was ushered into a war it did not want to fight: “It is plain enough how we were forced into the war. The extraordinary insults and aggressions of the Imperial German Government left us no self-respecting choice but to take up arms in defense of our rights as free people and of our honor as a sovereign Government.” So said Secretary of the Treasury, William Gibbs McAdoo, in an address to the American Bankers’ Association while encouraging the issuance of war bonds. He also defined the necessity of war on the part of the United States as an imperative: “We entered the war primarily because of the persistent insults and aggressions of Germany, the wanton disregard for American rights within our own boarders as well as on the high seas, the contemptuous violation of international law, and the ruthless destruction of American life and property”.

Despite these arguments, the United States was to form a more altruistic version of its role in the war. The postwar landscape found an ailing Europe and a thriving America at economic odds. The United States painted itself as a saviour of a ravaged European continent through its military aid during the war and its economic aid after it. As Richard Edmunds wrote: “Newspapers, ministers of the Gospel and public men, overlooking entirely the reasons which caused us to go to war for our own preservation, began in 1919 a campaign of praising ourselves with pious unction …” This hypocrisy was evident in the fact that the United States faced arduous economic trials before the war and the outbreak of the war became a chance for economic redemption for the US as, Edmunds again, “the Allies were buying from us foodstuffs and ammunition by the billions of dollars, and at exorbitantly high prices … there came a rush of activity in practically all industrial interests … During the next two or three years our prosperity was fertilized by the blood of millions of soldiers dying on the battlefields of Europe.”

Every elementary school had one. The kid who tattle-taled on all the other kids; the kid who, if the teacher had forgotten, reminded her to assign homework right before the bell rang; the kid who, during recess, somehow managed to strike out in kickball; the kid who was the smartest one in class, and who knew it. That kid was A. Piatt Andrew – friendly when he wanted to be, stuck up (even when he didn’t want to be), and always isolated by his penchant for knowledge. Andrew took great pains to protect his work from whom he considered the smaller minds of the economic and political world. He defended his positions on economic policy and its execution with passion, possessed a keen mind and a love for money and culture. A. Piatt Andrew was all this, and to those bankers, businessmen, and politicians who wanted to exploit his economic expertise, he was a loyal and able asset.

Born 12 February 1873 in La Porte, Indiana, Abram Piatt Andrew was bred to be an economist. His father was a successful banker and he gave his son the privileges of private schooling and a comfortable lifestyle. However, in his early days as a schoolboy, money was not something he was good at managing. As a student at the Academy of Maidenhead in Lawrenceville, New Jersey, staying as a guest in the Pershing household, he wrote home to his mother almost every day. At about 8:30 pm, after prayers, young Andrew would begin correspondence with his mother and write to her all the interesting and pressing matters of his day, and his mother always wrote back.

He enjoyed lacrosse and tennis very much. Most of his leisure time was spent collecting flowers with his best friend, Jimmy Studebaker, who Abram described to his mother as, “very handsome”. He was very interested in botany, and would press flowers and send them to his mother with many of his letters. She would send him flowers from home, and the two of them seemed to have a very rich and loving relationship.