Greetings to the Saker community and readers.
So, the UK people, contrary to the “script” that wanted a narrow Remain win have elected to leave the European Union. As it could also have been predicted, there are calls to repeat the vote as the result is not the “correct” one. And as if the extremely narrow gap between the two voting blocs was not bad enough – for the record 16,141,241 voted to Remain and 17,410,742 people voted to Leave – two of the members of the UK actually overwhelmingly voted to Remain and are now looking at other options.

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In Scotland, voices for a second independence referendum have started and Nicola Sturgeon, Scotland’s First Minister has stated that Holyrood (Scottish Parliament) will try to veto the exit decision.
As for Northern Ireland, their position is very nicely depicted here:
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Senior government officials in Northern Ireland have even called for a referendum to unite with the rest of Ireland. It appears that the United Kingdom might not be so united after all.
But what about the European Union itself? First, there is the fact that nobody ever implemented Article 50 which governs how a member state can leave the Union. Simply put, the process is the following:
  • First, the member state wishing to leave must explicitly and in very clear way formally request the European Council to invoke Article 50.
  • Following that the leaving member and the rest of the EU begin negotiations on a “Departure Treaty”, basically a set of rules that will govern the relationship between the two parties after the departure. These rules can be anything from aviation agreements to border controls, visa requirements, taxation etc. The important thing here is that once the agreement is reached, European parliament must ratify this treaty and then pass it to the European Council where a special majority of EU members (excluding the member asking to leave) must ratify the treaty. If memory serves, this majority has to be 75%.
  • Failing to reach an agreement within two years from the day of the invocation of Article 50, both the leaving state and the rest of the EU mutually agree to extend the negotiation period or all existing treaties between the leaving state and the EU are automatically cancelled.
It is clear from the process outlined above that there is a good chance that this divorce will be a drawn out process, despite the fact that the six founding members of the EU (Germany, France, Italy, Belgium, Luxembourg and the Netherlands) naturally want this process to be concluded as soon as possible.
The worrying thing about this event though is that the idea of an EU army became stronger. Already, the head of the head of the European Parliament Committee of Foreign Affairs, Mr Elmar Brok, is promoting the idea despite acknowledging that the EU constitution as it stands prohibits the creation of an EU army.I guess he took a page out of the US diplomatic group as he states that an EU army will strengthen the EUs foreign policy.
However, one is forced to wonder – does the EU really need an army? And most importantly, what will NATOs role be in all this?
To answer the first question, no. EU needs to realise that in order to have a foreign policy first and foremost you have to think for yourself and act independently or as an equal in an alliance. Being ordered around by other countries is counter-productive to put it mildly. And as the financial crisis in the European South has proved, EU is far more effective in getting what it wants by pushing its economic weight around.

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Now for the second question – NATO at the moment has 28 members, out of which 22 (including the UK) are also EU members. One can easily argue that the EU is effectively occupied by NATO. And of course, NATO = USA. I seriously doubt that the USA will accept any challenge to NATO dominance, unless this EU army initiative is a clever way to convince all EU members to increase defence spending for NATO under a different label and also draw funds from those EU members that are not NATO members. Needless to say that the people of Europe do not want to spend money on this, however this is duly ignored by the governments (at least those who can pay for this) and vague external threats have to be invented to persuade the populace.
It appears that while EU is at critical crossroads. Germany is calling for an EU army, Le Pen in France has formally asked Hollande for a vote on France exiting the EU. Hollande of course denied this request. The European south is either financially crumbling or on wobbly legs at best. Immigration and demographic change have started to create tensions in communities across the EU – Sharia police in Germany anyone?
So what does the future hold? Will the EU elites be vindictive against the UK and try to make an example of them in order to show to anyone else harbouring exit ideas to refrain from expressing them? Surely, EU can make life pretty miserable for the next UK government. But the question remains, who will pick up the UK’s tab once it leaves the EU? For example, the next time an EU member needs a bailout, who will cover UK’s share? While the net contribution amount might look small (£8,473 million for 2015), it still has to come from somewhere. According to official UK data from December, the UK contributes 12.57% of the total EU budget.
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Someone will have to pay for this. And it looks increasingly likely that the UK will get an exit deal based on WTO rules instead of the single market rules they are used to now.
Regardless of the correctness of the outcome in the UK referendum which is subjective to one’s views, the EU needs to take a really hard look on itself and decide which direction to follow in the coming years. Obviously the current model of consolidating industry to the EU core while forcing the periphery to be financially addicted to the EU no longer works.
There will be interesting times ahead.