UK security role in Europe will weaken after Brexit

Subject Brexit and international security. Significance Brexit in any form will make defence and security cooperation between the United Kingdom and the EU more difficult. While intelligence-sharing and security cooperation are likely to continue, even if in a more cumbersome form, there is a high likelihood of declining defence cooperation and a divergence of UK and EU defence efforts. Impacts Brexit will force EU member states to build up their military. The United Kingdom and Ireland will strengthen security cooperation over fears of a return to violence in Northern Ireland. The United Kingdom may be excluded from security arrangements between the EU and external actors such as China and the United States.

Subject Post-Brexit defence policy. Significance Much of the discussion surrounding the impact of Brexit on defence and security has focused on its effects on the EU. However, with the EU’s recent defence initiatives and London’s lack of a clear position on the future of EU-UK security cooperation, the United Kingdom could face greater risks than the EU. Impacts UK-EU security and defence cooperation will probably remain largely unchanged until the transition period ends in December 2020. EU defence cooperation will continue to develop, regardless of input from the United Kingdom. Uncertainty over Brexit negotiations will make London more reluctant to take on leadership roles in joint EU projects. The United States, France, Germany, Japan and Australia are likely to be London’s main countries of focus for strengthening defence ties.


Subject The Bratislava summit. Significance Leaders of the EU-27 -- all EU member states except the United Kingdom -- held an 'informal' summit in Bratislava on September 16, aiming to demonstrate their shared resolve to move forward with the integration process in the wake of the Brexit vote. While leaders agreed to a roadmap of policy plans, they skirted around the most divisive issues facing the EU and did not agree on any significant new initiatives. Impacts EU governments again failed to agree to a workable plan to address the migrant crisis, rendering an EU-wide solution increasingly unlikely. Significant agreements on improved security cooperation may not be reached until well into 2017. The EU is likely to block any UK efforts to maintain its current access to the single market without allowing for free movement of workers.


Significance At the same time, the EU will lose the United Kingdom’s vital role in coordinating intelligence and leading investigations. In addition, Brexit undermines the prospects for EU-UK security and defence cooperation based on institutionalised relations. Impacts Now that the politics of Brexit is less intense, the EU and United Kingdom have more capacity to focus on building pragmatic relations. The main EU nations will only join inter-governmental arrangements with London if such cooperation aligns with EU objectives. Regulatory and trade pressures could see European defence companies, such as Airbus, more reluctant to invest in the United Kingdom.


Subject Denmark's defence policy. Significance Denmark's decision to acquire a new fleet of fifth-generation F-35 stealth joint-strike fighter jets to replace its ageing and non-stealthy fourth-generation F-16s ends a long period of uncertainty around the future of the Danish air force. The purchase of the F-35s will also solidify and deepen Denmark's political-military links to the United States and could open the door for increased cooperation with other northern European countries operating F-35s such as the United Kingdom, the Netherlands and Norway. Impacts The decision will increase the chances of Finland also selecting the F-35 in its upcoming competition to replace its current fleet of F-18s. Participation in future out-of-area operations may be limited, owing to the need to increase the share of the procurement budget. The deal will help solidify Denmark's orientation towards NATO and Washington and away from defence cooperation under the EU.


Subject MiFID II implementation and compliance Significance The EU’s flagship investor protection reform -- the Markets in Financial Instruments Directive II (MiFID II) -- will come into force on January 3, 2018, Valdis Dombrovskis, the EU Commissioner responsible for financial stability, confirmed on October 17, saying that there would not be a further delay. Despite already having been given an extra year's extension, banks are struggling to comply in time because of the directive's complexity. Regulators, too, are behind in expanding their capacity to enforce it. Impacts Firms across the world that do any of their business within the EU will have to comply, not just those registered in the EU. All firms trading in financial instruments must comply but those where this is a small part of their business may be caught unawares. MiFID II will come into effect before the United Kingdom leaves the EU and is likely to be written into UK law post-Brexit. The United States is keen to deregulate, but US firms whose EU activity is not compliant will be punished, possibly harming US-EU relations.


Significance However, member states have the dominant foreign policy role in the EU. After Brexit, that will be France and Germany despite the United Kingdom insisting that it wants to maintain as close a relationship with the EU as possible. Impacts EU reformers will light on foreign policy as an area to drive forwarded integration. However, the EEAS lacks the competencies and institutional horsepower to be a force for integration. The strategic needs of the 27 post-Brexit EU members will be various, thus acting as a drag on integration. Smaller EU member states will see more advantage than larger ones in collectively pursuing foreign policy goals through Brussels. Larger member states will be unwilling to submit their national defence policies to greater EU authority.


Subject Outlook for the Five Eyes alliance. Significance The stability of the Five Eyes intelligence sharing partnership between Australia, Canada, New Zealand, the United Kingdom and the United States is under stress over Chinese participation in the members’ 5G telecommunications networks. Impacts Possible US concessions on the supply chains of Chinese firms would ease strain within the Five Eyes alliance. European corporates will redouble efforts to burnish their security credentials to capture 5G market share. London’s eventual decision on Huawei will influence the EU and Asian democracies.


Subject Bilateral relations between the United Kingdom and the United States. Significance UK Prime Minister Theresa May has been criticised for her eagerness to form a close relationship with US President Donald Trump, at a time when the new administration in Washington is lurching from crisis to crisis. However, as the United Kingdom heads towards negotiations on leaving the EU, it needs good relations across the Atlantic more than ever. Impacts Trump’s plans to roll back financial regulations will increase pressure for similar moves in the City of London. Good UK links with Republicans in Congress will be just as important as good relations with the White House. Investigations into links between the Trump administration and the Kremlin have the potential to overshadow other bilateral relations. The tone of the relationship will also be affected by the success or failure of Trump’s state visit to the United Kingdom later this year.


Significance European leaders are hoping for the best but preparing for the worst as they await negotiations on the United Kingdom's departure from the EU. A chaotic exit has not been ruled out, although cooler heads are likely to prevail eventually. Impacts The first months after Article 50 is invoked will be dominated by technical aspects; political negotiations may not begin before 2018. UK failure to take sufficient account of domestic politics in other EU member states is likely to be an obstacle in the negotiations. Governments under pressure from populist parties will be keen to ensure that the United Kingdom is not seen as better off after it leaves.


Significance Despite the increasing risk and the implications of a no-deal Brexit, Ireland and the EU remain united in support of the main issue preventing a Brexit deal, the backstop. Impacts A time-limited backstop is the most likely prospect for a Brexit deal compromise. Under a no-deal Brexit, Ireland would be under pressure to implement border checks and controls in order to protect EU rules. No deal would make it harder for the United Kingdom to negotiate free-trade agreements with the EU and the United States.


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