The EU tradition is to make a crisis an opportunity: the UK referendum result is that opportunity

After the result, the stock taking. Forget, for a moment, talk of revenge, expressions of disappointment,  forecasts of doom or for that matter of UK independence. No one in the UK would win any election or referendum by going to the electorate on a project of isolation; The UK public for decades has shown that it is consistently in favour of European co-operation.

The problems begin when talk of cooperation switches to talk of building a superstate. The outcome of the referendum, and the way it has been fought by both sides, shows clearly that there is little enthusiasm in the UK for a United States of Europe, as proposed for instance in the 5 President’s report, proposing further steps in that direction.

This is the complete text of Boris Johnson statement on the Brexit result.

Here is his speech in full: 

“I want to begin by paying tribute to David Cameron who has spoken earlier from Downing Street, and I know I speak for Michael when I saw how sad I am that he has decided to step down but obviously I respect that decision.

I have known David Cameron for a very long time, and I believe he has been one of the most extraordinary politicians of our age. A brave and principled man, who has given superb leadership of his party and his country for many years.

Delivering one nation Conservative government, making this country the most dynamic economy in Europe and with his own brand of compassionate Conservative that rightly earned his party the first majority government for decades.

It was his bravery that gave this country the first referendum on the European Union for 43 years. Today I think all of us politicians need to thank the British people for the way they have been doing the job for us. They hire us to deal with the hard questions and this year we gave them one of the biggest and toughest questions of all.

Some people are now saying that was wrong and that people should never have been asked in that way. I disagree, it was entirely right and inevitable and there is no way of dealing with a decision on this scale except by putting it to the people.

Because in the end this decision is about the people, the right of people in this country to settle their own destiny. The very principles of our democracy, the rights of all of us to elect and remove the people who make the key decisions in their lives.

And I think that the electorate have searched in their hearts and answered as best they can in a poll the scale the like of which we have never seen before in this country. They have decided it is time to vote to take back control from a EU that has become too opaque and not accountable enough to the people it is meant to serve.

In voting to leave the EU, it is vital to stress there is no need for haste, and as the prime minister has said, nothing will change in the short term except how to give effect to the will of the people and to extricate this country from the supranational system. There is no need to invoke Article 50.

And to those who may be anxious both at home and abroad, this does not mean that the United Kingdom will be in anyway less united, it does not mean it will be any less European.

I want to speak directly to the millions of people who did not vote for this outcome, especially young people who may feel that this decision involves somehow pulling up the drawbridge because I think the very opposite is true.

We cannot turn our backs on Europe. We are part of Europe, our children and our grandchildren will continue to have a wonderful future as Europeans, travelling to the continent, understanding the languages and the cultures that make up our common European civilisation, continuing to interact with the peoples of other countries in a way that is open and friendly and outward looking.

And I want to reassure everyone Britain will continue to be a great European power, leading discussions on defence and foreign policy and the work that goes on to make our world safer.

But there is simply no need in the 21st century to be part of a federal government in Brussels that is imitated nowhere else on Earth. It was a noble idea for its time but it is no longer right for this country.

It is the essence of our case that young people in this country can look forward to a more secure and more prosperous future, if we take back the democratic control which is the foundation of our economic prosperity.

We have a glorious opportunity, to pass our laws and set our taxes entirely according to the needs of the UK, we can control our borders in a way that is not discriminatory but fair and balanced and take the wind out of the sails of the extremists and those who would play politics with immigration.

Above all, we can find our voice in the world again, a voice commensurate with the fifth biggest economy on earth. Powerful, liberal, humane, an extraordinary force for good in the world.

The most precious thing this country has given the world is the idea of parliamentary democracy. Yesterday, I believe the British people have spoken up for democracy in Britain and across Europe and we can be proud of the result.”

The main points.

Johnson in this key statements commits himself to a number of very important points: one nation Conservative government; the taking back control from a EU that has become too opaque and not accountable enough to the people it is meant to serve; contrary to the 5 President’s call for an immediate start to talks, “there is no need for haste”; the UK to stay both united and European; “we are part of Europe”; a non discriminatory policy on border control; and the UK to remain “powerful, liberal, humane, an extraordinary force for good in the world.” And this crucial sentence: “The most precious thing this country has given the world is the idea of parliamentary democracy. Yesterday, I believe the British people have spoken up for democracy in Britain and across Europe and we can be proud of the result”. Extricating the UK from the supranational system is therefore the key task ahead.

Le Monde is not wrong.

The centre-left French newspaper wrote immediately after that Brexiters were already backpeddling, that there were voices saying that two thirds of parliamentarians are for Remain, that the result is not final, as it would be in France

France has come to interpret the results of referenda as mandatory. That is how Charles de Gaulle established precedent when he resigned in 1969, after his defeat in the referendum he called on the regions and the powers of the Senate. But the UK is a representative democracy, and the referendum outcome is advisory. You will note in Boris Johnson’s speech on the aftermath, that he says that the UK remains open and European, but that the key point of the referendum is rejection of supranationalism.

Let me disentangle the web of complexity here.

Point 1: The official position of the UK according to the 1972 European Communities Act is that the EU is supranational, and EU law prevails directly, without more do, over UK law.

Point 2: The German Constitutional Court, and other national supreme Courts, stand guard as arbiters of the fundamental rights of their citizens, most notably their fundamental rights as citizens to make their own laws through their own parliaments. (See below for a précis of the GCC judgement on the Lisbon Treaty).

Point 3: Nonetheless, academic studies show clearly that democratic rights have been sucked out of member states, via the EU policy process, creating the present situation which President of the EU parliament, Martin Schulz, has called a Frankenstein Monster.

Point 4: The principle debate among member states is about democracy, and where the burden of representativity should lie, at the federal or national level. The EU’s own opinion polls, let alone other well known pollsters, such as the Pew opinion polls, show quite clearly that the loyalty of European citizens goes first to their home states. In other words, the EU needs to ground its support in the public affections of the nation states.

Point 5: Clearly, the EU is not grounded in  UK effections. The reason is that the UK official view on the EU backs the least popular of all formulas, which is the supranational, ie EU laws, decisions, are directly converted into national laws. Johnson asked Cameron in the fifteen minute interview he held with Cameron before announcing that he would run for Leave,  to take the simple step of changing the UK official position, to one recognizing the primacy of UK law in the UK.

Point 6: Had Cameron conceded, the referendum would have been won by Cameron by an 80%+ majority. But Cameron decided to defend the UK’s position of the EU as a supranational entity before his own electorate and went down to defeat. This was quite predictable.

Making an opportunity out of a crisis.

And totally unnecessary. My position is, and I believe this is what Johnson will pursue, that the UK will stay in the EU, which morphs in effect into a European alliance of constitutional states,  with four principles: one is that the decisive say on policy resides with national parliaments; two, that the single market and its policing remain supranational, with very clearly defined limits; three, that foreign and security policy remain firmly in the field of cooperation; and fourthly, that there is a prior presumption of European loyalty.

There will be objections: the EU is federal or nothing; what to do with the Euro?; the institutions are all geared to accumulating ever more claims to power; large parts of the European populations look forward to a USE. All these are true, but subordinate to the key point which is that the EU to be sustainable it must be rooted in the affections of the peoples of Europe. Right now, it is most definitely not. That is the fundamental reason for the EU’s crisis.

One more point: the positive attitude in the EU has been to take advantage of a crisis. The UK referendum provides this opportunity. It provides the opportunity to ensure that national democratic and constitutional states affirm their prior rights, and that the European alliance of constitutional states, establishes itself on that hard and fast ground. All else is so much chaff in the wind.

German Constitutional Court case on Lisbon 30 June 2009

30 June 2009 the German Constitutional Court in Karlsruhe – “Bundesverfassungsgericht” – published a radical verdict on the relations between the national parliaments and European integration. The German ratification of the Lisbon Treaty was approved in principle but upheld in practise.

The German national Parliament was asked to pass national legislation to safeguard the influence of the Bundestag and Bundesrat on the implementation of the Lisbon Treatybefore Germany could legally ratify the new Treaty.

The Court would not accept that the German Government on its own may use the flexibility clause in Article 352 TFEU or the easy treaty amendment paragraph in Article48.6 TEU to widen EU cooperation nor the “passarelles” foreseen for the abolition of unanimity voting in the future.

For these constitutional changes the German Court, insist on a positive decision in the German Parliament each time. It also insist on national parliamentary participation in the many new areas where the Lisbon Treaty introduce majority voting.

The Court does not accept more powers to the European Parliament as enough compensation to the voters to overcome the democratic deficit when powers are moved to Brussels.

The Court also insist on national sovereignty and a national “living democracy” in key political areas as citizenship and fundamental rights, social and financial policy, legislation in criminal matters, civil and family law, relations to the churches and defence.

The Court rejects core constitutional elements in the Lisbon Treaty.

The primacy of EU law will only be accepted as long as the European institutions respect their delegated competences. German citizens and companies are invited to go to the German Constitutional Court if they find that the EU has legislated – or judged – outside the areas explicitly delegated to the EU.

The Court implicitly rejected the content in Article 344 TFEU giving the monopoly to judge on interpretations on EU law to the European Court of Justice in Luxembourg and Declaration no 17 reminding on the primacy of EU law.

The Court insisted on national parliamentary participation in all areas where member states would lose their right of veto.

The judges unanimously insisted, by 8 votes to nil, on prior approval by the German Parliament – and implicitly by other National Parliaments – for the use of the so-called “bridge articles” and “passerelle clauses” whereby Government Ministers on the Council of Ministers or the European Council can alter EU law-making from unanimity to qualified majority voting.

The judges also required full participation of national parliaments in the use of the flexibility clause in Article 352 TFEU, which permits the EU to take action and adopt measures to obtain one of the EU’s objectives even if the Treaties have not provided the necessary powers.

The most striking element in the judgment was that the Court implied the need for  the involvement of national parliaments in all aspects of EU law-making. They referred to democracy as being a principle common to all the EU member states.

The involvement of national parliaments in EU law-making is therefore a necessity. If not, the principle of democracy will have been fundamentally breached.

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About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) (www.chinauncovered.net) His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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2 Responses to The EU tradition is to make a crisis an opportunity: the UK referendum result is that opportunity

  1. Roger Simonsz says:

    Interesting insight, Jonathan, as always. Although you put it in more succinct terms, there is indeed a democratic deficit that needs to be addressed within the EU and the neo-liberal agenda that has been gaining ground, in a large part thanks to UK involvement, needs to be curtailed, you hint at that when you talk about policy decisions over riding national law. Neo-lib countries, like the Netherlands, have succeeded in placing commissioners in key posts to further the interests of their narrow policies leading to the current financial crisis and citizen’s disconnect from the EU. However, your point 6 to me seems off. There was so much more at play in the referendum, immigration, xenophobia, false promises of money being re-located, that the mere fact of Cameron agreeing with Johnson on a technicality that most people voting Leave wouldn’t even understand, would, in my opinion, never have resulted in an 80% win for Remain. This hatred of the EU has been building up for years, fanned by Farage and the predominantly right-wing press, coupled with years of unnecessary “austerity” and and the powder keg of wanting to “stick it to the man” is ready to blow.

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  2. It is a technicality. But a crucial one. The UK is a sovereign state, if it wished to be. Its voters clearly think it should be, because they like being able to sanction their lawmakers. In brussels, that is impossible.
    So my point was: stay in, on our terms.
    That would have yield a n 80% victory( a guess), but a decisive victory for in.
    There would have been ructions:
    the Commission would have complained. But the counter would have been that the measure would not automatically disguard EU rules, just submit them to examination, and eventual amendment, rejection or acceptance;
    I know the argument about the “right wing press”. But if that is the case, how do you explain that the French are hugely more anti EU than the UK, according to the pew poll:http://www.pewglobal.org/2016/06/07/euroskepticism-beyond-brexit/

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