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Brexit: What now for Britain, Belgium and Europe?

22:01 01/07/2016
A week after the historic decision by UK voters to leave the European Union, local politicians, business leaders and professors give their reactions, and their predictions

The Belgians are poring over crucial questions about Brexit – the decision by UK voters to leave the European Union. Among them: Can flourishing trade relations with the UK ever be the same again? Will plummeting investments recover? Is it the end of the EU? Are all the Brits in Brussels going to pack up and go home, causing a crash in the housing market?

Depending on who you talk to or which newspapers you read, the region is set to suffer from a Brexit fallout of Lehman Brothers-style proportions or, as Carl Devos, political science professor at Ghent University, predicts, a “modest” drop in economic growth but a recovery in the long term.

According to Devos, what we have seen on financial markets is a “panic reaction” that will eventually even out. “I’m not pessimistic about the economic consequences,” he says, adding that the overall impact on Belgium will be, he repeats, “modest”.

For the economy, much hangs on what kind of deal on trade will be struck between the EU and the UK, since Belgium, and notably Flanders, has a very open, trade-dependent economy. (The monthly Belgian business confidence indicator is seen as a bellwether for the EU-wide economy.)

Devos contends that such a deal is likely to be similar to what exists now. “Britain will do everything it can to have as free access to EU markets as possible. You can already see that the strongest members of the Leave campaign are playing it down.”

As for the overall impact of Brexit, he says, “I think much more will be left the same than will change.”

Eurosceptic, Eurorealist

Not everyone agrees. Dave Sinardet, political science professor at the Free University of Brussels (VUB): “Of course, we don’t know exactly what the impact will be, but the impact economically, financially and on the future of the European Union will be quite evident.”

In his view, the doom-and-gloom scenarios of a financial crisis that will affect portfolios across the world are not beyond the realms of possibility. “We seem to be going in that direction,” he says. “We are seeing a problematic turn of events.”

Politically, the consequences will be complex, and the consequent debate over the EU’s direction will likely exacerbate existing tensions within the government. “The members of the current federal government are not on the same page,” says Sinardet. “The NVA is more Eurosceptic – though they call it Eurorealism – while the French-speaking liberals have more of a classic pro-EU approach.”

While the Belgian government pulled together when outgoing UK prime minister David Cameron asked for better conditions earlier this year, insisting that an “out” vote would not be grounds to renegotiate membership of the bloc, the Brexit vote will likely reinforce nationalist and separatist sentiment, says Sinardet.

“The NVA was already saying then that this was going in their direction,” says Sinardet, adding that Brexit will “have an effect on the whole dynamic of European integration”.

The fear now, he says, is that dissenting ideologies will be emboldened by Brexit, and governments will have a harder time reaching decisions on crucial questions such as its future in the EU, a trade deal and defence spending. “It might be difficult to have a strong Belgian voice in these debates,” says Sinardet.

And if all that isn’t enough, Brexit looks set to provoke separatists across the EU, including in Flanders. “Scottish independence will be seen by NVA as some kind of precedent,” says Sinardet. And Devos agrees, saying that a Flemish referendum will be back on the agenda.

But as doomsayers predict a break-up of the EU, Sinardet says the economic turmoil will eventually turn around nationalist and separatist tendencies. “Maybe they will say it’s best to stay in the EU after all,” he adds, “and that Brexit doesn’t seem to be a good idea.”

Another Europe

The news of the UK voters’ decision came as a shock to most people – including many of those who had voted to leave. Belgian prime minister Charles Michel captured the mood with his first reaction: “This is a blow for the European project. We are waking up in another Europe.”

Flemish minister-president Geert Bourgeois says he “deplored” the decision. But his immediate thoughts were on the future. While the UK was negotiating its exit terms, he says, “it’s crucial that parallel negotiations begin with regards to a free-trade treaty, as extensive as possible, with the United Kingdom, in order to eliminate all tariff or non-tariff trade barriers. We have to be pragmatic in the interests of our welfare and our jobs.”

For Belgium’s representative in the European Commission, Marianne Thyssen, the show must go on. “Let’s be clear,” she says. “This is not at all what we would have wanted, and it’s not good news. It’s a simple fact that Europe is stronger with 28 members than with 27. This is not a good thing for the image of the union, but the end of Europe? I really don’t think so.”

Herman Van Rompuy, the former Belgian prime minister who went on to become the first president of the European Council, was “angry and sad” on hearing the news. “Angry because this referendum should never have taken place,” he says. “It could also mean the end of the United Kingdom. And sad because I have been a European since the age of 15 or 16. This is not the end of the European Union, but it feels like an amputation.”

The news has affected the business community as well. The Flemish chamber of commerce, Voka, is warning of “a long period of uncertainty ahead” for those Flemish companies with links to Britain.

“A lot of our companies are dependent on exports to the United Kingdom,” says managing director Hans Maertens. “Brexit brings us into uncharted territory; the question is how this will work out in the future. The British voted with their hearts, not their heads.”

Daily advantages

One of the companies likely to be affected is Balta, which sells interior textiles and carpets to the UK. It employs 3,400 people, 2,600 of them in Flanders. “We will be going through an unstable period, but in the long run things will stabilise,” says marketing director Geert Vanden Bossche. “Our employees and our clients are convinced things will get back to normal.”

Paul Buysse, chair of the board of Bekaert and author of Belgium’s code of Corporate Governance, was brought in by federal labour minister Kris Peeters to chair the working group looking into the consequences of the British decision.

“To begin with, we need to enter hard negotiations with the British to show them that we take the European Union very seriously,” he says. “For years, Europe kept spinning its wheels because the British blocked everything. Europe may now be a little bit smaller as a major power, but it remains an economic power. Paradoxically, Brexit could mean more rather than less Europe.”

Pieter Timmermans, CEO of the Federation of Belgian Enterprise, also sees a possible opportunity in the decision. “Europe now needs to consider how we can advance the integration process at a tempo supported by the people and by business,” he says.

That means focusing on core tasks such as competition, the asylum crisis, energy costs and infrastructure. “Europe needs to better communicate the advantages it provides in people’s daily lives in order to gain their support.”

Written by Emma Portier Davis and Alan Hope



Herman Van Rompuy says that "I have been a European since the age of 15 or 16". So what was he before then?

Jul 2, 2016 13:31

Belgian! He was born in 1947, before the existence of the EEC ...

Completely agree on the need to communicate the advantages in people's daily lives. So far, a very little effort has been made, at least, in the UK. Do the European institutions not prepare short, sharp information packages in all the languages to inform the general public in the member countries? Do they not send representatives to talk and explain to groups, schools, universities and clubs in the member countries? It's called PR ...

Jul 3, 2016 20:39

He was always a European as well as a Belgian. The two are not mutually exclusive.

Jul 4, 2016 08:50