As China is establishing their own economic union in the South China Sea, the economic union of Europe is still experiencing the aftershocks of the British referendum to leave. The EU’s response to the Brexit came from Angela Merkel:
The immigration issue, particularly in relation to Middle Eastern refugees and migrants, was a major point of contention between the EU bureaucracy and British conservatives and possibly the royal family. The fact that Merkel continues to demand EU control over this policy is somewhat surprising considering that the Chancellor herself admitted that the immigration policies in contention undermined domestic security this past Monday. Other serious criticisms include loss of national sovereignty and rule by non-elected committees, but increasingly unpopular economic policies (and sanctions preventing trade with Russia in particular) are bringing the wealthier entrepreneurial classes into the dispute against the EU. The fact that many member nations are voicing identical grievances should be concerning as the Brexit could spur a contagion of new national referendums to leave. By withholding trade privileges from non-members, Merkel is attempting to establish additional consequences for leaving.
“We will make sure that negotiations will not be carried out as a cherry-picking exercise. There must be and there will be a palpable difference between those countries who want to be members of the European family and those who don’t,” [Merkel] said.
And those additional consequences may be necessary as Italy has rejected the renewal of the Russian sanctions that have affected the Italian economy as much as Russia. Italy’s pro-EU prime minister may be ousted in a fall referendum, and Italian ministers have stated that they will let the EU disintegrate further if there are no reforms.
Judging from Merkel’s reaction, the fall of the EU, albeit unlikely, is a very real possibility. If Italy leaves, you can expect other southern European nations to leave as well. Both Greece and Spain were subject to repressive austerity measures and both are major trade partners with Italy, and their departures could easily spell the end of the union. The Italians may have forced the EU into making a concession or two, but if we were to see it all come crashing down around the head of Merkel and the European bureaucrats, expect to see Germany picking up the pieces to start over again.