Brexit and Differentiated Integration: The Politics of Difference - Benjamin Martill Dahrendorf Forum IV Working Paper No. 18 26 May 2020 20 March ...
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Brexit and Differentiated Integration:
The Politics of Difference
Benjamin Martill
Dahrendorf Forum IV
Working Paper No. 18
26 May 2020
20 March 2020
About the Author Benjamin Martill is an Associate at LSE IDEAS, the foreign policy think tank of the London School of Economics, and a Lecturer in Politics and International Relations at the University of Edinburgh. His research lies at the intersection of British and European politics. Author email: benjamin.martill@ed.ac.uk The Dahrendorf Forum The Dahrendorf Forum is a joint initiative by the Hertie School in Berlin and the London School of Economics and Political Science, funded by Stiftung Mercator. It recognises that expert knowledge and public debate can each benefit from mutual exposition. The Dahrendorf Team generates and disseminates social science research that is both policy relevant and of the highest standard. The researchers concentrate on impacting high-level policymakers and practitioners close to the centres of political action and decision-making. Acknowledgements I am grateful to Inga Runarsdottir for her excellent research assistance and to Iain Begg and Kevin Featherstone for their helpful comments on an earlier version of the manuscript. Contact: Inga Runarsdottir, a.i.runarsdottir@lse.ac.uk
Brexit and Differentiated Integration:
The Politics of Difference
Abstract
The Brexit vote has led to renewed interest in differentiated integration. But the relationship between
Brexit and differentiation is far from clear, since different aspects of British withdrawal lead to
divergent outcomes: some predict a significant upturn in differentiation, others claim the principle
will be diminished. Five aspects are relevant: (1) the return of differentiation to the agenda, (2)
lessons from the British experience, (3) enabling consequences of UK withdrawal, (4) the removal of
British opt-outs, and (5) arrangements for the future relationship. Examining these cross-cutting and
complex effects produces a cautious assessment. Brexit is not sufficient to bring about wholesale
movement to a more differentiated Union, but nor does it make the principle obsolete.
Keywords
Brexit; differentiated integration; European politics; UK-EU relationship; opt-outs1 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020 Introduction Long-standing debates on differentiated integration have been reawakened by the British decision of 23 June 2016 to leave the European Union (EU). The result has been a recent proliferation of scholarship on Brexit and differentiation and the emergence of diametrically opposed predictions about the effects of British withdrawal on the level of future differentiation in the EU. Some have claimed that the result will be more differentiation, since Brexit highlights the negative consequences of refusing to countenance more derogations, places the topic of differentiation back on the EU’s agenda, and will require specifying forms of external differentiation to govern the UK-EU future relationship (Burk and Leuffen 2019; De Witte 2018; Schimmelfennig 2018). Others predict less differentiation, as Brexit removes a significant proportion of existing opt-outs from the Union, paints the political benefits of opt-outs in a poor light, and enables greater unity of purpose among the EU27 (Bickerton 2019; Riedel 2018). How do we assess these competing predictions and make sense of the implications of Brexit for the future of differentiation in the EU? Any answer will require an assessment of each of the distinct aspects of Brexit linked to differentiation, such that a full picture can emerge. This working paper discusses five such aspects: (1) the re-emergence of differentiation in debates on the future of Europe, (2) the lessons from the British experience of differentiation, (3) the enabling consequences of British withdrawal for EU reform, (4) the removal of the UK’s set of opt-outs, and (5) the specification of the future UK-EU relationship. It sets out, for each, the anticipated effects on differentiation, the key areas of debate and contestation, and the likely outcome in light of the available evidence. The analysis shows that the relationship between Brexit and differentiation is complex and contested: Brexit may have spurred renewed talk among EU members about the potential of differentiation, but broad support among member states for a radically more differentiated Union is lacking. British experiences of differentiation highlight the limitations of opt-outs, but they are hardly representative and the lessons to be drawn from the UK experience are unclear. The enabling effects of British withdrawal are overrated, and in any case operate more as a permissive than a substantive cause, meaning everything depends on the outcome of EU-level debates on differentiation. Brexit does mean that the number of existing opt-outs is drastically reduced, but it does not remove the sources of demand for them. And the future relationship will offer elements of a bespoke deal but these are likely to be highly circumscribed by the EU’s incentive to avoid articulating a model that would appeal to other countries. By examining both the claims and counterclaims associated with each aspect, the working paper shows that existing predictions of radical change in the prospects of differentiation, favourable and unfavourable alike, are somewhat wide of the mark. Brexit is not sufficient to spur reforms which would place differentiation centre stage, such as proposals for a multi-speed Europe, while the reality of British withdrawal actively disincentivises devising generous forms of third country access. But British withdrawal will not make differentiation obsolete either, since demand for exceptions from laggards will
Brexit and Differentiated Integration | 2 continue to exist, especially while further integration is on the cards. Differentiation will emerge as future demands for individual exceptions materialise, within individual policy areas where some members wish to advance specific projects (e.g. security and defence), and as part of the articulation of the future relationship with the UK. In short, it will be business as usual for differentiation after Brexit. The argument proceeds as follows. The first section sets out the concept of differentiated integration, giving examples of existing (and past) forms of differentiation, and setting out some of the common arguments for and against. The second section looks at the implications of Brexit for differentiated integration, outlining the five aspects of British withdrawal mentioned above with implications for the level of differentiation in the future EU. The third section takes stock of the debate and considers how these aspects interact with one another, noting that the evidence lends itself to a more cautious assessment of Brexit’s effects on differentiation. Differentiation in European Integration Differentiated integration refers to a set of strategies through which the EU has attempted to reconcile the heterogeneity of preferences within the Union with the demands of further integration (Stubb 1996, 283). It involves a move “away from common rules towards a form of cooperation where different member states have different rights and obligations within specific policy areas” (Svendsen & Adler- Nissen 2019, 1421). Differentiation thus “allows some EU member states to go further in the integration process, while …differentiation is regarded by allowing others to opt not to do so” (Chopin & Lequesne many as a natural feature of 2016, 531). It is not a system based on a combination of regional integration, and as a overlapping agreements, but rather one based on a “single wholly predictable outcome of the organizational and member state core and a territorial increase in the EU's extension that varies by function” (Schimmelfennig et al. competencies as well as the 2015, 767; see also Leuffen et al. 2013, 10; Warleigh-Lack diversity of its membership. 2015, 876). Far from being a problematic development, differentiation is regarded by many as a natural feature of regional integration, and as a wholly predictable outcome of the increase in the EU's competencies as well as the diversity of its membership over the decades (Warleigh-Lack 2015, 881). As the Union's competencies expand into those previously considered core powers of the member states, demand from some quarters for forms of differentiation has naturally arisen, since member states are keen to preserve their identity and sovereignty as the Union encroaches on ever more 'politicised' domains (Hooghe & Marks 2009; Leruth 2015; Schimmelfennig et al. 2015, 765; Sternberg 2013). The result of these gradual and selective processes is an enduring divide between those members participating in the full range of EU policy areas (the eurozone, Schengen, Justice and Home Affairs (JHA), security and defence) and those which are keen to proceed at a slower pace, if indeed at all (Schimmelfennig & Winzen 2014).
3 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020 Differentiation comes in all shapes and sizes (see Table 1) (e.g. Burk & Leuffen 2019, 1397; Holzinger & Schimmelfennig 2012; Leruth & Lord 2015; Warleigh-Lack 2015, 876). Some member states hold opt- outs from EU policy areas, including Denmark from monetary integration, the Common Security and Defence Policy (CSDP), and the Area of Freedom, Security and Justice (AFSJ), Poland from the Charter of Fundamental Rights (CFR), and Ireland from Schengen (Adler-Nissen 2014; Gstöhl & Frommelt 2017; Olsen 2011). A number of countries maintain de facto outsider status from the euro, even though they are expected to join once they meet the criteria, with Sweden, Poland, Hungary, and the Czech Republic dragging their feet on adopting the common currency (Schütze 2015, 809-810). There are also a number of extra-EU agreements between sub-sets of member states, such as the Fiscal Compact of 2011, the Prüm Convention, and the Schengen Convention (since incorporated into EU law) which represent a further form of differentiation (Cardwell 2019, 1412; Fossum 2015, 804). Other forms of differentiation involve third country participation in EU policies (Lavenex 2015). Norway adopts over 75% of EU legislation as a member of the European Economic Area (EEA) (Egeberg & Trondal 1999), Switzerland has a similar arrangement based on bilateral treaties (Gstöhl 2002), while Turkey maintains a customs union with the EU (Aytuğ et al. 2017), and Ukraine incorporates parts of the acquis through its Association Agreement (Gstöhl 2015). Specific regions also have distinct arrangements under the EU’s legal architecture owing to historical complexities, with examples including Cyprus and, more recently, Northern Ireland (e.g. Skoutaris 2011). And differentiation exists within a number of other policy areas as a way of facilitating more binding forms of selecting integration, as is the case with Enhanced Cooperation (in, for example, divorce law and patents) and with Permanent Structured Cooperation (PESCO), which sees a broad sub-set of member states collaborating on selective defence projects (Svendsen & Adler-Nissen 2019). While differentiation at present refers to a (growing) set of exceptions, there have been many proposals over the years to elevate differentiation to a core principle of integration, including suggestions for ‘two- speed’ or ‘multi-speed’ Europe in which different member states proceed along the path at a different rate, proposals for ‘Europe à la carte’ in which countries may select distinct policy areas that they wish to opt in to, and similar proposals based on ‘variable geometry’ in which groups of countries can proceed together selectively in individual policy areas (Stubb 1996, 284; Warleigh 2002, 10).
Brexit and Differentiated Integration | 4
Table 1: Examples of differentiated integration in the EU
FORMAT EXAMPLES
Denmark (euro, CSDP, AFSJ), Ireland (Schengen), Poland (CFR),
Opt-outs from EU policies Sweden (euro, informal), Vicegrad Three (euro, informal), Former UK
(euro, AFSJ, CFR)
Prüm Convention, Fiscal Compact, Schengen Convention (now incor-
Extra-EU treaties
porated)
Models of external association Norway, Switzerland, Turkey, Ukraine, Future UK
Diffusion of EU norms and
European Neighbourhood Policy, external adoption of EU standards
standards
Policy-specific frameworks for
Enhanced Cooperation; Permanent Structured Cooperation (PESCO)
selective integration
Regions with specific arrange- Monaco, Turkish Republic of Northern Cyprus, Northern Ireland, San
ments or derogations Marino
These diverse forms may be distinct in a number of respects, but the underlying principle of different
treatment for different countries (or regions) raises common questions of efficiency and political
sustainability. Advocates of differentiation claim that it can help make policies function more efficiently
(e.g. Lord 2015, 783). The diversity of economic models across Europe, for instance, means that
differentiation can prevent the straitjacketing inherent in the application of common EU rules to diverse
national circumstances (e.g. Bickerton 2019). Differentiation can also allow member states to target their
contributions according to their particular skillsets, resulting in a more efficient division of labour (e.g.
Blockmans 2018, 1812).
Advocates also that claim differentiation is politically useful, since it allows recalcitrant member states to
skip difficult steps without undermining the integration process tout court. Without differentiation
“integration agreements would not go beyond the preference of the most status quo-oriented member
state” (Schimmelfennig 2018, 1158). The value of differentiation lies not only in overcoming short-term
opposition, but also in reinforcing pressure in the longer term for recalcitrant member states to change
their preferences (Chopin & Lequesne 2016, 534). Pressure to join the in-group may include spill-over5 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020
effects from other policy areas and evidence of the benefits accruing to group members in the form of
“excludable networks and club goods” (Leruth et al. 2019c, 1385).
Yet differentiation, critics claim, can be inefficient too. Opt-outs establish deviation from common
policies which can be difficult to manage, and the decision to grant them is often based on political
considerations, with little thought given to how it might affect policymaking in the area concerned. In the
clearest examples of sub-optimality, differentiation might be conceived as 'cherry-picking' in reverse, since
member states can opt out of policy areas where their participation could add real value. Moreover,
differentiation leads to considerable complexity, with a confusing array of partially overlapping policies
and a distinct array of divergent governance mechanisms (Cardwell 2019, 1412; Featherstone 2017, 5).
The proliferation of new formats in recent years only adds to this complexity (Chopin & Lequesne 2016,
534).
The political benefits of differentiation may also fail to materialise. Non-participating member states may
feel excluded and this can lead to a decline in solidarity in place of efforts to 'catch up' with the pack.
Resentment may arise from states which favour integration but are opposed to moving forward in specific
policy areas, “causing some states to feel excluded from an integration process in which they do wish to
take part” (Chopin & Lequesne 2016, 534-535). And a democratic deficit arises in cases where third
countries adopt EU policies, since they lack the informal and formal channels of influence required for
genuinely legitimate governance (Featherstone 2017, 4; Leruth et al. 2019c, 1386; Thompson 2017).
Brexit and Differentiated Integration
The British decision to leave the EU in the referendum of 23 June 2016 has resulted in a renewed flurry
of interest in differentiated integration. The relationship between Brexit and differentiation has been the
subject of three journal special issues (Fabbrini & Schmidt
…Brexit has resulted in a
2019; Faure & Smith 2019; Leruth et al. 2019b), a number
number of overlapping and of individual works (Featherstone 2017; Leruth et al.
potentially competing pressures for 2019a; Martill & Sus 2018; Schimmelfennig 2018;
the EU to manage when it comes Svendsen 2019; Svendsen & Adler-Nissen 2019), a
to specifying how much forthcoming handbook (Leruth et al., forthcoming), and
differentiation (and what kind) is several influential think-tank reports (e.g. Pisani-Ferry et
appropriate for the Union. al. 2016) in recent years.
Yet the relationship is complex and uncertain. Some predict a more differentiated Union will result, since
Brexit has placed proposals for differentiation firmly back on the agenda, created demand for flexible
forms of integration to manage the future relationship, and highlighted the consequences of failing to
consider more radical exceptions (Burk and Leuffen 2019; De Witte 2018; Schimmelfennig 2018). Others
claim differentiation will be more limited after Brexit since the country with the most opt-outs and the
greatest potential to undermine EU unity had left, and since the British experience of integration (andBrexit and Differentiated Integration | 6
withdrawal) paints differentiation in a poor light (Bickerton 2019; Cardwell 2019). Still others have
pointed out that the effects of Brexit could go either way (Chopin & Lequesne 2016; Leruth et al. 2019c;
Riedel 2018; Svendsen 2019).
The diversity of claims in the literature suggests that Brexit has resulted in a number of overlapping and
potentially competing pressures for the EU to manage when it comes to specifying how much
differentiation (and what kind) is appropriate for the Union. Any comprehensive assessment will
therefore need to take each of these aspects, and the relationships between them, into account. The next
section discusses five aspects of Brexit linked to the level of differentiation in the future EU: (1) the re-
emergence of debates on the future of Europe, (2) the lessons to be drawn from the British experience
of differentiation, (3) the enabling consequences of British withdrawal, (4) the removal of the UK’s opt-
outs, and (5) the specification of arrangements for the UK-EU future relationship.
(1) The Future of Europe Debate
For the EU, the Brexit vote came as a shock and resulted in a period of profound reflection (Burk &
Leuffen 2019, 1395). Various proposals for the future of the Union were tabled in this period, a number
of which imagined a more starkly differentiated Europe (De Witte 2018, 227). The Commission’s White
Paper set out one option (“those who want more do more”) which envisaged greater levels of
differentiation (European Commission 2017). French proposals for a eurozone budget imagined a two-
speed Europe with a vanguardist core at its centre (Schimmelfennig 2019). And policymakers, think-
tankers, and academics turned to differentiation as a means through which to alleviate the EU’s many
challenges (e.g. Pisani-Ferry et al. 2016). The proliferation of proposals for a more differentiated Europe
implies to many that differentiated integration merits renewed discussion, and suggests the “reformist
impulse of Brexit may … help to reform the EU into a more differentiated system that will …
accommodate countries willing to integrate at various speeds” (Riedel 2018, 99-100).
But there are reasons to doubt that the resurgence of this debate will lead inexorably to a more
differentiated Europe. For one thing, it is not clear on a conceptual level that greater unity of purpose
among the EU27 can be equated with a greater chance of differentiation. If unity is so high, then it is
equally plausible that greater harmonisation would be the result, not differentiation. Conceptually at least,
the EU’s Brexit moment appears more a permissive cause than a substantive driver of differentiation per
se. And EU institutions are dubious about differentiation. Former Commission President Juncker’s 2017
State of the Union address set out a ‘sixth scenario’ not included in the 2017 White Paper which made the
case for unity rather than differentiation (Juncker 2017). Not all member states are on board either. While
France has consistently pushed for a more differentiated Europe (e.g. Cooper 2017, 655), others have
their reservations, including Germany and other more Europhile countries which worry about declining
solidarity between insiders and outsiders, and other countries which currently possess opt-outs and fear
being further left behind (Leruth et al. 2019c, 1386).7 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020
Then there are the institutional impediments to reform. As a polity built on consensus, decision-making in
the EU is often subject to the ‘joint decision trap’ in which the lowest common denominator prevails in
situations where any broad consensus on reform cannot be constructed (Kroll & Leuffen 2016, 1312;
Scharpf 1988). This does not preclude differentiation – which exists already as part of the status quo – but
it does require broad support for the adoption of wholesale reform, making it difficult to see how a more
comprehensive vision of a differentiated EU can emerge. Thus, while Brexit may have placed differentiation
back on the table, it is not clear if the principle of a more comprehensively differentiated Europe has
anywhere near the level of political support necessary to instigate wholesale reform.
(2) The British Experience of Differentiation
Brexit also raises questions about the British experience of differentiation. Is it a coincidence – many
have wondered – that the country with the most opt-outs was also the country keenest to leave? Certainly
the UK’s opt-outs have had adverse consequences over the years, not least the declining influence of the
UK when set against the priorities of eurozone members (Thompson 2017, 439-440). Moreover, a desire
for more differentiation – including exemption from aspects of free movement – was a key reason why
David Cameron sought to hold a referendum on the UK’s EU membership in the first place (Kroll &
Leuffen 2016; Smith 2016). This has led some observers to claim that Brexit shows the “limits of internal
differentiation” (Riedel 2018, 104) and the first time “disintegration rather than differentiation is the
preferred choice for an EU member state” (Chopin & Lequesne 2016, 531). The suggestion is “that
differentiation might be counterproductive in terms of
…if differentiation is the
promoting further integration in the medium to long run”
problem, there is the question
(Leruth et al. 2019c, 1386).
of what the solution is, and
whether this involves greater Establishing what the lessons are from the British experience
harmonisation … or… of differentiation is not a simple task, however. For one thing,
greater levels of differentiation it is not entirely clear what the lesson is supposed to be. It
could be simply that differentiation does not produce the
anticipated ‘catch-up’ effects scholars initially predicted, since the UK ultimately opted to leave. But the
lesson could equally be that differentiation contributed to the British decision. The lesson might be a more
prosaic one; namely, that the UK overplayed its hand, given Cameron’s intention of remaining in the
Union by winning the referendum (e.g. Riedel 2018, 99, 109). Or it could be that special treatment begets
further requests for such treatment, and that differentiation is not politically feasible for this reason. All
interpretations have a face validity to them, as do various other interpretations of the vote (see Table 2).
But, significantly, not all of these interpretations lend themselves to the view that differentiation
contributed to the UK’s exit.
And, if differentiation is the problem, there is the question of what the solution is, and whether this
involves greater harmonisation and the end of special treatment, or whether it rather requires greaterBrexit and Differentiated Integration | 8
levels of differentiation so as to overcome the externalities resulting from the asymmetric effects of
common rules applied to diverse economic models (Bickerton 2019). And there are questions about the
representativeness of the UK and the applicability of the lessons of Brexit. If the UK’s problems are
actually common problems, and if British Euroscepticism reflects a deeper malaise about the direction of
Europe, then aspects of the British experience may apply more broadly. But if the UK is seen as an
outlier in the integration process – which for many it is (Carl et al. 2019; de Búrca 2018; George 1988;
Glencross 2014) – then it is not clear how relevant are the lessons from the British experience of
differentiation.1
Table 2: Possible interpretations of the lessons of Brexit for differentiation
THE LESSONS OF BREXIT
Differentiation leads to divergence rather than later convergence
The UK could never have been placated and would at some point have left
Differentiation leads to demands for more differentiation in the future
If more differentiation had been countenanced, Brexit would not have happened
Cameron’s gamble failed but differentiation is not to blame
Differentiation does not work (but equally does not exacerbate)
Opting out of monetary integration made withdrawal more viable
(3) The Enabling Effects of British Withdrawal
It is often claimed that Brexit will have an enabling effect on European integration (Cardwell 2019, 1414).
There are several aspects to such claims. The propensity for the UK to block initiatives is no longer an
issue (Martill & Sus 2018; Whitman 2016, 45). Brexit has helped to establish unprecedented unity among
the EU27, facilitating agreement on a number of new EU-wide initiatives (Hobolt 2016; Jensen &
Kelstrup 2019; Laffan 2019). And British withdrawal has shifted the locus of power in the Union from a
1In fact, the extent of British Euroscepticism raises the possibility that British dissatisfaction with the EU motivated
both the need to secure opt-outs and the subsequent decision to leave, making the differentiation/Brexit link
something of an artefact. The referendum dynamics were not driven by views on differentiation, but views on the EU
as a polity (Riedel 2018, 109).9 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020
tripartite structure to a Franco-German axis which is more integrationist and easier to co-ordinate (Krotz
& Maher 2016; Krotz & Schild 2018). The removal of the UK thus signals for some a more coherent
Union more likely to opt for greater harmonisation rather than further differentiation. In the words of
one observer, with the “major troublemaker and marauder” out of the room “the EU may accelerate now
towards … ‘ever closer union’” (Riedel 2018, 100).
But the enabling effects of Brexit are overstated. The unity of the EU27 is closely linked to the Brexit
process, of which it is partly an artefact (Martill & Staiger, forthcoming; Turner et al. 2019). It has not
made agreement on substantive questions any easier, and it may not outlast the immediate context of the
Brexit talks. Even the Franco-German engine on which the future of integration is supposedly premised
appears prone to misfiring, and Paris and Berlin have not seen eye-to-eye on a host of questions,
including eurozone reform, enlargement, and security and defence. And the supposed British veto has in
the past hidden from view other Eurosceptics happy to rely on the automaticity of British opposition to
further integration (Martill & Sus 2019, 13; Nielsen 2017). After Brexit, these countries will have to stand
up and be counted.
It is also not the case that greater unity equates to more harmonisation, even if British withdrawal can be
said to further the integration process. Brexit may prompt the EU27 to pursue a less differentiated model,
or it might transpire that maintaining the unity of the EU27 will require exploring new forms of
differentiation (De Witte 2018, 227). As with the discussion on the future of Europe, Brexit is only a
permissive cause in this respect, since it leaves open the question of whether the EU27 agree upon a
future course which contains significant scope for differentiation. The fact that London is not involved in
the decision simply makes it less likely that either course of action will be opposed.
(4) The removal of British opt-outs
Brexit also changes at a stroke the institutional make-up of the EU, since British withdrawal removes a
significant proportion of existing opt-outs. Over the course of its membership the UK built up a number
of opt-outs, including aspects of the Area of Freedom, Security and Justice (formerly JHA), the
eurozone, the Social Chapter of the Maastricht Treaty, the CFR, and Schengen (e.g. Schimmelfennig 2018,
1158).2 This means that “when the UK leaves the EU, the latter will be shedding the state with the most
opt-outs from EU policy” (Murray & Brianson 2019, 1431) as well as “the member state most ready to
challenge some of the fundamentals of the legal order” (Cardwell 2019, 1407). The clear implication is
that differentiation, in the form of opt-outs, will be weakened with the UK outside of the tent.
The removal of the UK’s opt-outs may be said to inveigh against future differentiation in a number of
respects. Most simply, there are now fewer opt-outs in existence, meaning – in numerical terms – that less
2We might also include in this list those commitments obtained through Cameron’s renegotiation which would have
afforded the UK a distinct position (e.g. Cardwell 2019, 1414; Riedel 2018).Brexit and Differentiated Integration | 10
differentiation can be said to exist. There is also a symbolic effect. With differentiation less prevalent in
the system, its perceived legitimacy will decline; opt-outs may not be seen as reasonable ‘options’ when
there are fewer examples and when these are also in decline. And there is the loss of British influence.
The UK’s political, economic, and strategic significance made it a candidate for special treatment over the
years, and the broader system of opt-outs has owed part of its existence to this combination of
preferences and power. Other member states may not be able to demand the same concessions as the UK
did.
But demand will still exist for opt-outs even without Britain in the EU. The UK is not the only member
state which has required opt-outs as a means of overcoming domestic opposition or ensuring that
particular national priorities are respected. Brexit may have made opt-outs less prevalent, but this is by
dint of the UK leaving rather than any change in their perceived utility. In any case, opt-outs have arisen
in response to specific short-term needs rather than the articulation of any kind of norm (Adler-Nissen
2008). In this sense, the number of existing opt-outs is not especially relevant in establishing whether new
requests are justified. Moreover, there are multiple additional sources of differentiation beyond national
opt-outs. And if the UK negotiates access to EU policies in the future then the decline in opt-outs may
just be matched by an increase in external differentiation (Murray & Brianson 2019, 1431).
(5) The UK-EU Future Relationship
The need to establish a framework for the UK-EU future relationship raises the spectre of increasing
external differentiation. Many third countries are already deeply involved in EU policy areas, and many of
these institutional arrangements (especially the ‘Norway model’) featured prominently in the referendum
debate. Anything short of the hardest Brexit will result in the UK participating in EU policies on a
selective basis, with terms specified by distinct governance arrangements (Leruth et al. 2019c, 1383, 1391;
Schimmelfennig 2018, 1156; Svendsen & Adler-Nissen 2019, 1419). A tailored ‘British model’ of third-
country association could accentuate differentiation, if it resulted in more innovative forms of
differentiation given the UK’s selective interest in certain aspects of integration and its strategic and
financial clout (e.g. Giegerich & Mölling 2018; Schelkle 2018). In this sense “Brexit could become a
ground-breaking and thus unpredictable case of differentiated disintegration” (Leruth et al. 2019c, 1383).
Yet there are political risks involved here. Brussels worries that offering the UK the benefits of
membership from outside will undermine the value of membership (Laffan 2019; Schimmelfennig 2019,
186). If Brexit looks to be a success there is a risk that other member states will seek to follow the UK
out the door, or that advocates of exit in other member states will be empowered (De Vries 2017; Van
Kessel et al. 2020). Selective access (‘cherry-picking’) might set a damaging precedent and undermine the
logic of the integration process, which requires of all member states some commitments in areas where
they do not individually benefit. Even informal British participation could undermine the decision-
making autonomy of the Union and risk introducing a potential spoiler into the mix (European11 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020
Parliament 2018). And any bespoke model would contribute to the seemingly endless proliferation of new
models which has been a growing concern in recent years (e.g. Featherstone 2017, 5).
Because the EU holds the cards in the talks, the outcome is likely to reflect Brussels’ preferences more
than London’s (Hix 2018; Howorth 2019, 265; Martill & Staiger, forthcoming; Schimmelfennig 2018,
1156). This would accord with the experience of the talks to date: Theresa May’s proposals for a customs
partnership and a comprehensive security agreement were rejected by Brussels, on grounds discussed
above (European Parliament 2018; The Telegraph 2018). This does not mean that the UK-EU future
relationship will not contain bespoke aspects. Where the Commission will countenance distinct
arrangements is in areas where it is keen itself to diverge from existing models. For example, the
arrangements for Northern Ireland in the Withdrawal Agreement are bespoke because Brussels (and
Dublin) were keen to erect safeguards against a hard border, and the EU has recently rejected a Canada-
style free trade agreement (FTA) with the UK in the absence of level playing field safeguards (BBC News
2020).
Taking Stock of Differentiation after Brexit
Clearly, some aspects of Brexit favour greater differentiation,
The evidence suggests that like the need to specify arrangements for the UK-EU future
limited forms of differentiation relationship, the growth in proposals for the future of Europe
will continue to persist, but that which envisage a greater role for differentiation, and the role
the Union will not come to which demand for greater differentiation played in the
approximate a more radically decision to hold the Brexit referendum. But other aspects
differentiated organisation, push against this, including the British experience of
either internally or externally. differentiation and the removal of the UK’s opt-outs. It is not
always clear-cut which direction each aspect points in: the
lessons of Brexit are open to interpretation, enabling factors resulting from UK withdrawal may facilitate
movement in any direction the EU27 can agree on, and the renewed debate on the future of Europe has
opened the door for a variety of proposals, not all of them based on greater differentiation. Outside
factors also weigh on each of these aspects, including the unity of the EU27, the question of the UK’s
representativeness as an EU member state, and the power dynamics in the Brexit negotiations.
The evidence suggests that limited forms of differentiation will continue to persist, but that the Union
will not come to approximate a more radically differentiated organisation, either internally or externally.
Proposals for more wholesale differentiation may have come to prominence after the referendum, but
they have not found broad support among a majority of member states or the EU institutions. Brexit has
rather enabled progress in a number of specific issue areas in which differentiation plays a part, notably in
security and defence through PESCO, but the ‘inclusive’ format adopted precludes a more radical
development based on a small vanguard of member states. The demand for opt-outs will not disappearBrexit and Differentiated Integration | 12 after Brexit, since British withdrawal does not solve the problems faced by other critics of further integration and since opt-outs have emerged previously in response to specific scenarios which are likely to emerge again. And Brexit will likely result in novel forms of external differentiation to accommodate the UK-EU future relationship, but political constraints will prevent the emergence of a distinct ‘British model’ and the EU will do all it can to avoid setting a precedent for other third countries. Taking into account these multiple aspects simultaneously leads us to a more cautious assessment of the prospects of differentiation than that of prevailing scholarly and policy discourses. Brexit is not sufficient to bring about a wholesale reorientation towards a Union in which differentiation takes centre stage. Proposals for a multi-speed Europe or variable geometry will not emerge from Brexit. Nor will Brexit remove differentiation from the EU’s toolbox. Rather, the effects of British withdrawal are more subtle: opt-outs may lose their principal exemplar but the reason for their existence – foot-dragging by sceptical governments – will remain. French preferences for greater differentiation will feed into broader debates about EU reform, but the outcome will be a compromise between this and other positions. Reforms in specific areas may utilise forms of differentiation, as PESCO does, but to overcome specific member- state objections, not to foster divergent paths between distinct cohorts. This cautious assessment follows from the recognition that aspects of Brexit are contested and the effects on differentiation at times unclear. Different aspects point the causal arrow in different directions, while others are simply not as efficacious as has been suggested. For instance, a number of factors discussed above point towards a more conservative estimate: Brexit is in many respects a permissive cause, rather than a substantive driver of harmonisation or differentiation. The outcome depends as much on inter- member state politicking as it does on British withdrawal. And there are significant political and institutional barriers to change, even if the desire for EU reform is broadly shared. Differentiation as a basis for this reform will emerge only from a broad consensus that this is the best way to proceed. And the politics of the divorce process itself (Winn 2018) throws the spotlight on a number of political risks linked to greater differentiation which the EU is keen to avoid.
13 | Dahrendorf Forum Working Paper No. 18 | 26 May 2020 Conclusion Differentiation is an intrinsic part of the European integration story, with a number of examples of selective engagement with EU policies from member states and third countries. The UK’s vote to leave the EU in June 2016 spurred a wave of renewed attention to the topic of differentiation as scholars and policymakers grappled with the implications of the Brexit vote. The literature so far paints a complex and contradictory picture, with divergent outcomes for differentiation predicated on distinct aspects of British withdrawal. This working paper has examined five aspects of British withdrawal with implications for the level of differentiation in the post-Brexit EU: (1) the renewed debate on the future of Europe, (2) the British experience of differentiation, (3) the enabling consequences of Brexit, (4) the removal of the UK’s opt- outs, and (5) arrangements for the UK-EU future relationship. For each of these aspects the paper set out the anticipated theoretical logic, examined key areas of contention, and looked at the impact based on the available evidence. The discussion highlights the complex and contested nature of these linkages: while Brexit has cultivated intense discussion on the future of Europe, agreement on proposals for a more radically differentiated Europe is lacking among member states. The British experience of differentiation highlights the risks associated with opt-outs but is not representative of other member states’ experiences, and the causal logic is contested. British withdrawal may indeed enable changes that weren’t possible before, but this is a permissive cause which does not tend towards either differentiation or harmonisation. And while Brexit will remove at a stroke the number of opt-outs, it will not remove the demand from other member states to exclude themselves from further integration. Finally, although the UK-EU future relationship will likely contain bespoke aspects, these will be strictly limited by the political risks a successful ‘British model’ carries and will not amount to an example available (or desirable) to others. What emerges is a more conservative estimate of Brexit and differentiation. British withdrawal will not lead to wholesale reform of the EU based on differentiation, nor will it make the principle obsolete. Those who have predicted such outcomes, this paper has argued, have focused on specific, individual aspects of Brexit rather than looking at the whole picture. Rather, Brexit will result in smaller-scale change, and in some cases the continuation of the status quo. Proposals for wholesale differentiation will not be fully realised but will nonetheless feed into the broader debate. Specific forms of (limited) differentiation may be articulated in specific policy areas, like the PESCO example, to facilitate movement and improve efficiency. Opt-outs will always be necessary but will remain the exception to the rule. And models of external differentiation will slowly proliferate as and when the EU regards third-country participation to be advantageous. Brexit, in other words, spells business as usual for differentiation.
Brexit and Differentiated Integration | 14
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