The UK has been working with France and Germany on defence issues as the E3 group since the early 2000s. This article considers the potential for this cooperation to continue, given the variety of potential outcomes for the Brexit negotiations.
The article first considers why each country may find the continuation of the E3 beneficial. The author argues that all three members share foreign and security policy interests which are served by the current format. Additionally, the alliance keeps the UK aligned with Europe on international issues and allows it to remain a strong leader in European security issues.
The author then considers different Brexit outcomes and what this could mean for the E3. If Brexit negotiations turn “hostile”, the author argues that France and Germany may not be able to uphold their commitment to the EU whilst working with the UK on other issues. In the longer term, if the UK decides to diverge from the EU on security issues, the E3 alignment could be less desirable for all of them. Additionally, if the E3 grouping causes friction with the other EU member states, France and Germany may choose to prioritise EU relationships over their work with the UK. The EU and the UK’s future relationship with the US may also play a part in deciding the E3’s future.
The article states that the countries themselves want cooperation to continue, but it is unclear what shape this will take until negotiations have concluded.
Read the full article: Alice Billon-Galland and Professor Richard G Whitman, ‘E3 cooperation beyond Brexit: challenging but necessary’, Chatham House, 2 September 2020.
Impact of a No Deal Brexit
Writing in the LSE blog, Thomas Sampson considers the claim that the potential impact of Brexit will not be as bad as the consequences of the Covid-19 pandemic on the UK economy. He believes this claim puts “undue weight” on the impact of an event that is temporary, compared with a political decision which carries further long-term costs.
Sampson outlines the immediate impact that Covid-19 has had on the economy, as well as its predicted long–term effect, based on data from the Bank of England. He compares this to UK Government predictions of the economic consequences of a no-deal or of a free trade agreement (FTA) with the EU.
Considering which event could produce the bigger economic shock, he explains that Covid-19 is estimated to have a sharp dramatic effect initially, but that this will level out within the year to a permanent 1.7% decline in GDP. In contrast, he says the effects of either a no-deal or FTA situation are expected to emerge more slowly, but have a longer–lasting impact. For example, he states that a no-deal scenario is expected to decrease UK GDP by 7.6% over 15 years.
The author explains that there are different variables involved in determining economic shocks, such as how interest rates change or how changes in output are valued. However, overall, based on current forecasts, he concludes that Brexit is “expected to be by far the bigger shock” to the economy.
Read the full article: Thomas Sampson, ‘A no-deal Brexit may still be more costly than Covid-19’, LSE blog, 26 August 2020.