The Implications of Brexit on Baltic Security
Arvamus 01 Nov 2016 JBANCEWR
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Alexander Blums, JBANC, Oct 31, 2016
On June 23, the people of the United Kingdom and Gibraltar voted to discontinue the country's membership in the European Union. This came as a surprise to many people throughout the world, in part due to polling results showing the “remain” side in a lead. In the lead-up to the referendum, concerns were raised about the decreased ability for Britain to deal with security situations if it were to leave the EU. As former British ambassador to the United States Christopher Meyer said, “The UK leaving the EU would be a major blow to the EU’s ability to prevent conflict and make its citizens more secure.” Now that the United Kingdom has voted to exit the European Union, let us look at some possible scenarios which could potentially undermine Baltic security.

The UK’s net contribution to the EU is around £8.5 billion per year. That is around 10 billion euros, which makes up less than 7% of the EU’s annual budget. Furthermore, only a fraction of the EU budget is spent on physical or economic security programs in the Baltic states. The consensus seems to be that even if direct EU funding and funding to various EU programs would stop from Britain, there would be little short-term effect on the ability of the European Union to carry out its core functions. This is mainly due to Britain being tied to the EU budget until 2020. Furthermore, it remains to be seen what and if any changes to the existing funding model Britain could make during the upcoming Brexit negotiations.

Another easily dismissible scenario for how Brexit could negatively affect Baltic security is that Baltic exports to the UK could decrease along with remittances sent from citizens from Latvia, Lithuania, and Estonia living in the United Kingdom. This could then lead to difficulties for the Baltic governments to meet their goals of spending 2% of GDP on defense. The Baltic states export relatively little to the United Kingdom. Exports from Latvia and Lithuania to the UK compose less than 5% of the total exports of those countries, and in the case of Estonia, that number is closer to 2.5%. It would be difficult to see how this would impact the Baltic economies in any major way. When it comes to remittances, it is extremely unlikely that Westminster would impose any kind of financial transfer restrictions to EU member countries. As for the significant number of people from the Baltic states working in the UK, it is also unlikely that they will be forced or chose to move back to their home countries because of Brexit. And even if they do, the Economist Intelligence Unit estimates that the net benefactor of remigration would very likely be the Baltic states themselves.

Recently, I met with Andris Teikmanis, the Ambassador of the Republic of Latvia to the United States, and former ambassador to the United Kingdom, who said the same thing that I have heard from many security experts who have worked in or with the United Kingdom. Throughout the 20th and 21st centuries, Britain has been an exceptionally close economic and military partner to the United States. This is what is commonly known as the “Special Relationship.” With such close ties, Britain is perceived as a bridge between America and its long-term European partners across the Atlantic. A diminished relationship with Britain, and correspondingly with the U.S., may seem like a potential issue for Europe. However, as far as practical diplomatic, military and domestic security is concerned, not much would change. Firstly, since all parties benefit from common intelligence sharing, the existing arrangements would likely remain in place. Secondly, since the end of the Second World War, Britain’s military power has significantly diminished. The remaining EU countries combined have much more significant forces, providing a bigger incentive for the U.S. to sustain close ties to the UK.

Finally, assuming not a lot would change in terms of NATO alliance commitments, the UK may still face some military challenges because of Brexit. The United Kingdom’s nuclear submarine program is based in HMNB Clyde in Scotland. With 62% of Scottish referendum voters voting to remain in the EU and Prime Minister Theresa May denying the possibility of a Scotland opt-out from Brexit, there has been speculation that the Scottish people could hold another referendum to leave the United Kingdom. If that happens, it is unclear if the UK could maintain its naval base there, and as a consequence, its nuclear program. However, as one post-Brexit YouGov poll found, the likelihood of that remains low as many voters in Scotland are reconsidering their position on the EU.

Despite Prime Minister May’s plans to carry out a “hard Brexit”, the decision made by the UK electorate will likely have little impact on the economic or military security situation inside the European Union. For the Baltic states, even if a worst-case scenario happens, trade will not be impacted too significantly and remigration is not likely to have any negative consequences on the Baltics. Transatlantic ties have the potential to be as strong as ever if the Baltic communities continue lobbying for further cooperation.

(Alexander Blums is in his third year studying International Relations at the University of Southampton. Alexander has been interning for JBANC since August, before that having worked in the Public Policy department for his university, promoting evidence-based decision making in the British Parliament. Prior to that, he worked for MEP Sandra Kalniete's policy advisor Pēteris Vinķelis at the European Parliament in Brussels.)
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