Europe’s non-euro 8 fear consequences of Brexit vote

Concern that balance of power will swing strongly in favour of eurozone governments.

Britain’s departure from the EU will deprive the eight other countries in the bloc that are not in the euro zone of a powerful ally, forcing them into difficult policy choices, according to officials and analysts in the nations concerned.

“The UK’s exit from the EU will change the relationship between eurozone countries and those without the common currency, to the detriment of the latter,” said Sebastian Plociennik, head of the EU programme at the Polish Institute of International Affairs, a think-tank.

“They will be faced with a choice between fast-track adoption of the euro or political and economic marginalisation.”

While not everyone in non-euro countries would see the future in such stark terms, the non-euro nations are worried that, without the UK, the EU balance of power will swing strongly in favour of eurozone governments. That could make it more difficult for the interests of those outside the single currency to gain a proper hearing.

To the extent that France, Germany, Italy and others pursue initiatives aimed at closer economic, financial and fiscal integration of the eurozone, the impression could arise that the non-euro countries are stuck in a sort of EU second tier or outer circle.

Lubomir Zaoralek, Czech foreign minister, was among the first to warn of the risks, saying in the wake of the Brexit vote: “The debate on the EU’s future must take place on the platform of 27 states … The wrong response would be hasty integration.”

Apart from the UK, the non-euro states in the EU are Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania and Sweden.

Disagreements run deep among eurozone governments over a more integrated currency union, including on common deposit insurance and fiscal transfers.

But countries doubtful about adopting the euro, such as Poland and Sweden, found the UK a reassuring presence in Brussels, demonstrating with its economic weight and financial sector’s strength that the EU was beyond any doubt a multicurrency union.

With the UK inside the EU, the combined gross domestic product of the non-euro member states amounts to about 40 per cent of that of the 19 eurozone nations. With the UK out, the GDP of the non-euro states will shrink to about 16 per cent of the eurozone.

Including the UK, the non-euro countries have a combined population of 170m, half that of the eurozone. Without Britain, this figure shrinks to 105m, or just over 30 per cent of the eurozone total.

The author: Michel THEYS

Michel Theys, a Belgian native, began his career as a civil servant, serving the public for several decades. After retirement, he shifted gears to follow his passion for journalism. With a background in public administration, Theys brought a unique perspective to his reporting. His insightful articles, covering a wide array of topics, swiftly gained recognition. Today, Michel Theys is a respected journalist known for his balanced and thoughtful reporting in the Belgian media landscape.

Related posts

Leave a Comment