BREXIT AND POSITIONING OF EU 27 MEMBER STATES

Written by authors based at universities and research institutions across Europe, and compiled by the London School of Economics Dr. Tim Oliver

Austria

In economic relations the impact of Brexit will be much higher for the UK than for Austria due to the low levels of trade between the two countries. As a result, the negative effects of the Brexit on the Austrian economy will be limited and there will be new possibilities for the small number of Austrian enterprises who will need to make up for any loss from reduced trading links with the UK. Brexit will give new impetus to existing critical public opinion in Austria on EU matters. This will not necessarily lead to another exit debate but will definitely redefine Austria’s position within the EU. At the same time, the pro-European government and pro-European parties also view the whole Brexit as a possibility for re-adjusting certain policy options in the EU and in Austrian-EU relations as a means to tackle rising popularity and support for populist and Eurosceptic opposition parties.

Belgium 

Belgium is a strong partisan for a more integrated EU. Belgium’s priorities will be to continue on the path to greater integration . Belgium will not accept the creation of any ‘special status’ for the UK in order to save face. This is because of a fear of triggering a domino effect that sees other EU Member States demanding the same privileges. Indeed, the Belgian position is to negotiate the exit first and a new trade deal second. Belgium wants to continue the integration process – especially at the Eurozone level. It is important for Belgium that any withdrawal negotiation undertaken with the UK does not block deeper integration. Indeed, the Belgian Government sees Brexit as a possible opportunity to clarify the design and the finality of the European Union. In the same vein, Belgium places a lot of trust in ideas developed among the group of six founding Members States on the future of Europe. The above is despite the fact that Belgium will be one of most exposed EU Member States in economic terms.  Belgium will suffer a particularly significant impact due to its exports and cross-investment with the UK, with an increase in business failures from 1.5% to 2.5%. Belgium is the UK’s fourth largest customer and its fourth largest supplier, exporting more than €17 billion in 2014. Britain is also the fourth largest provider for Belgium, with €11.9 billion of imports. The country has one of the largest trade surpluses with the UK, equal to 1.8% of GDP in 2013.

Bulgaria

After almost 10 years of EU membership Bulgaria continues to keep a low profile on EU issues and policy making. Bulgaria is not expected to come up with any red lines on its own. Instead it will share many other countries’ political concerns about an eventual domino effect of withdrawal referenda elsewhere and a serious weakening of the EU. With regard to the general framework for future EU-UK relations, Bulgaria can be expected to align its stance with the big and powerful players, foremost Germany. With regard to specific Central-East European concerns it will probably continue coordination with Eastern partners. Cooperation in security and defence issues, quite central for UK-Bulgarian relations, is organised rather on a bilateral track. From the Bulgarian point of view NATO will continue to provide a framework for strong UK involvement, but will certainly not be enough to compensate for the UK’s role in the shaping of a common European foreign and security policy, nor the UK’s leverage with regard to the much aspired role for the EU as a global player. In terms of trade, the UK ranks 12th on the list of Bulgaria’s export destinations and 17th on the list of Bulgaria’s import partners. In 2011 Bulgaria achieved for the first time since 2000 a trade surplus in its relations with the UK, but given the relative small scale of trade, the British withdrawal from the single market cannot be expected to cause a major economic shock. However, even if the number of Bulgarian workers in the UK is rather low in comparison to other Central-East European countries (the UK Office for National Statistics estimates that 65,000 Bulgarian-born immigrants were resident in the UK in 2014 – compared to 170 000 Romanian-born and 790 000 Polish-born), Bulgaria will be interested in keeping the UK as part of the Single Market with its freedom of movement. Furthermore, as the poorest country in the EU, Bulgaria will be interested in a Norwegian type settlement for the UK that sees a full financial contribution to the EU budget.

Croatia

The total of Croatian exports to the UK is just 2%. The UK extended restrictions on the mobility of Croatian workers until 2018, with a possible further extension for another two years after that. Short of a thick bilateral agenda between the two countries, Croatia has little incentive to discuss any red-lines in case of the EU negotiating UK exit. It is to be hoped that bilateral relations will adapt to any new situation and that cooperation within NATO will remain and be unaffected. However, Brexit will further undermine the already weakened EU enlargement policy to which Croatia subscribes and it will open discussion in Croatia about its realignments within (and outside) the EU.

Cyprus

Though on the one hand, one might expect Cyprus to opt for harsh terms on those deciding to leave the EU, so that a favourable precedent is not created for states potentially wanting to exit in the future, the Government of Cyprus will likely be more sensitive and flexible. Given the special relationship between Cyprus (a former British colony and member of the Commonwealth) and the UK, the Government will definitely seek to control any adverse effects stemming from a possible British exit and try to make this development as smooth as possible. This desire stems in no small part from the fact that commercial and financial ties between the two countries are of vital importance to the economy of Cyprus, and the number of Cypriot nationals living in the UK (and vice versa) is significantly high. As a result, Cyprus will want to see the UK remain within a European free trading area that also includes free movement of people, so that existing ties that have been further strengthened after Cyprus’s EU entry, will not be jeopardised in any way. Such an arrangement will secure that Britons and Cypriots will be able to move freely between the two countries while also the provision of financial, commercial and other services will continue to develop seamlessly. Furthermore, a smooth exit will guarantee, at least to some extent, the stability of the exchange rate (Euro-Sterling), a vital variable in maintaining the high level of economic transactions taking place between the two countries. At a political level, the close relations between the two countries will not be affected extensively. The UK retains two sovereign military bases on the island and is also one of the three countries responsible for guaranteeing the independence of Cyprus. Consequently, it has a direct involvement in the ongoing negotiation process and the attempts to reach a peaceful settlement that will reunify the island. This direct relationship is not dependent on the European position of either of the two countries.

Czech Republic

The Czech government will seek to protect European integration from the fallout from Brexit, it will also be conscious of several other factors linking the UK to the EU and Czech Republic. The Czech Republic and the United Kingdom share similar opinions on many areas of EU policies, such as completion of EU single market, liberal trade policy, and reducing administrative burdens so as to increase the competitiveness of the European Union. As the UK’s role in Czech foreign trade has been increasing for years and the British export market was the fourth most important for the Czech Republic in 2015, Brexit will have a negative impact on the Czech economy. Therefore, it will be crucial for the Czech Republic to seek the UK’s close cooperation with EU countries not only in the area of the internal market, but also in international trade policy. Moreover, the UK’s withdrawal will negatively influence EU regional policy. As a net beneficiary of EU money from structural funds, it will be key for the Czech Republic that the EU-UK agreement be similar to the arrangement with other non-EU members in the European Economic Area. The Czech Republic as well as the UK have been keen promoters of a strong transatlantic link in the EU’s Foreign and security policy. Therefore, the Czech Republic will seek to establish close relations with the UK in this area in order to maintain effective cooperation between the EU and NATO. There are an estimated 45,000 Czech citizens living in the UK. Hence, in negotiations over Brexit, the Czech government will insist on guarantees of non-discrimination of Czech workers in the UK.

Denmark

Denmark will  strongly support keeping as many political and economic links as possible to the UK. One would expect Danish support for an arrangement which will facilitate UK trade with the EU. Given the significant overlaps in views on the value of free trade, Denmark will presumably seek UK’s close involvement in the internal market. It will also argue for close cooperation between the EU and the UK on international trade issues. A European Economic Area (EEA) style arrangement may be an aim. Denmark and the UK both have a strong Atlantic inclination. Denmark will no doubt seek substantial UK involvement in the foreign and security policy of the EU; it will aim to institutionalise close political consultations at least as strong as in the relationship between EFTA and the EU. It will also promote close British association with the ESDP, even if Denmark will have less clout in this field due to the Danish defence exemption. Copenhagen will also continue to stress the importance of a good relationship between the EU and NATO. This has always been the Danish line, but will be even more relevant with the UK outside the EU but in NATO. One area in which Denmark may take a tougher stance towards the UK is on fisheries. Here Copenhagen will see that UK access to the Danish/EU parts of the North Sea fish stocks are matched with an equivalent access to British fish stocks in a quid pro quo. It will still be part of Copenhagen’s overall approach to the EU to prevent further withdrawals. The dominant Danish view is that the EU is essential for Denmark for economic and political reasons even if little European mythology is explicitly expressed. So the general attempts to keep the UK as closely involved with the EU as possible will be balanced against concerns for keeping the EU as a working political and economic structure in Europe. The Danish support for a close UK association with the EU is therefore likely to be clear but have a low profile

Estonia

For Estonia the withdrawal of the UK from the EU will have an immediate practical question in the form of the EU’s rotating presidency. The UK withdrawal will change the essence of the EU. It is not about reshuffling the seats in the Council or the European Parliament and seeing how a redistributed QMV works. Estonia will find itself faced with difficult questions which it will need to make its position clear on, not least because holding the EU’s Presidency means it will need to lead on such matters. These will include whether it will agree to an EU-UK deal that allows the UK continued access to the Single Market, whether it will expect freedom of movement as part of some UK membership of the EEA, and whether (and how) the UK could be involved in EU cooperation on security matters relating to Russia.

Finland

Brexit will result in substantial economic and political costs which are difficult to quantify. The UK’s traditional support for reducing intra-EU trade barriers and promoting free trade arrangements with third countries have made the UK a natural ally of Finland. Finland also values the UK’s emphasis on pragmatic EU decision-making in Brussels. A constructive and pragmatic approach will probably emerge in Helsinki. Yet any agreement is likely to be assessed vis-a-vis existing arrangements of economic and political association with the EU as well as what is compatible with the EU Treaties. Although slowly decreasing, the UK’s share of Finnish foreign trade is significant. Avoiding disruption to trade and economic links more broadly will be a Finnish priority. Finland will also aim to find pragmatic solutions to questions about Finnish-UK migration. Given the small numbers involved this should not be a difficult question. In terms of the EU’s foreign and security policy, the UK’s departure will be seen as a setback. Yet Brexit is not seen as likely to change the UK’s and other NATO members’ fundamental security priorities. As a non-NATO member, Finland might also hope that the UK remains supportive of efforts to further develop the EU foreign and security policy, although the UK’s doubts about developing EU structures in this field are known in Helsinki. Finnish positions will also reflect an assessment of the broader economic and political implications of a major member state leaving the EU. In this regard, Finland will most likely attempt to strike a balance between a good and well-functioning EU-UK relationship, and unity and cohesion among the remaining EU27. Finland has invested a lot politically and economically in the European Union. This includes stabilization of the single currency of which Finland is a member, unlike the UK and other Nordic EU members. The EU is also seen to have positive (yet largely in-direct) security implications for Finland in an increasingly challenging security environment. Thus the viability of European integration will more than likely be the first priority for Finland.

France

It is very likely that France will take a hard line in the exit negotiations. An area of particular attention for the French will be on the access to the single market, especially in the services sector. Some in France hope that a Brexit could lead to firms moving to Paris – instead of Frankfurt or other places in Europe.

Germany

The main German reflex when discussing the future of the Union at large is to first work with Paris, but there are questions about what a strong Franco-German alignment on a Brexit could look like in substance. There is some thinking in Berlin that the time is not yet ripe for another push to deepen integration, but that the EU’s wider reform agenda, and in particular that of the Eurozone (such as economic reform and debt restructuring), remains clear. The problem with any big new initiative lies in implementation, partly because of a Franco-German set of disagreements. Berlin is well aware that even within the wider coalition of founding members it is currently difficult to get a sense of togetherness on major questions. There is a risk that a Franco-German initiative would only contribute to more rifts within the rest of the Union. When it comes to the process of handling Brexit, the German government will wait until the domestic political situation in the UK settles and Britain invokes the withdrawal clause.

Greece

Greece  is not expected to significantly influence Brexit negotiations . Its main priority, however, will be to push for guarantees that Greek employees in the UK will not be disadvantaged as well as to preserve the harmonious economic co-operation between the two countries. In parallel, the Greek government will have no alternative but to carefully proceed to the implementation of necessary remaining structural reforms in the framework of the third bailout in order to show to its partners that it remains committed to an ever closer union and seeks to be in its core.

Hungary

The Hungarian perceptions towards a negotiated British exit from the European Union can be approached from three perspectives. Primarily Hungary is part of the EU and shares a common negotiation platform with other EU member states – the general conditions of accessing the single market for the UK will be decided in that framework. Although Hungary alone is just a low-middle size member state regarding the voting rights in the EU, Hungary will be on the side of the negotiation table consisting of 444 million people. And although the UK should have to negotiate an agreement with the EU, in practice the agreement should be reached with 27 different member states. A common EU position on the accessibility of the single market will not be easy without addressing the concerns of individual countries or block of countries. Secondly Hungary along with the Visegrad 4 countries (Poland, Slovakia, the Czech Republic, Hungary) were very strong opponents of the UK’s attempt to limit the free movement of labour, and to cut the in-work and out-of-work benefits for migrants coming from the EU. Any further limitation will face strong resistance. Hungary’s primary aim will be to ensure that the Hungarian community living in the UK will not be further discriminated and future job seekers will enjoy the same conditions as far as possible.  Approximately 300-500,000 Hungarians currently live in the UK, with the share of immigrants significantly increasing over the past five years. If the EEA model is negotiated then Hungary and the V4 countries are expected to insist that the EEA membership rules should not be loosened – so accepting the free movement of people and contribution to the EU budget must remain intact. Comparing the current net budgetary contribution of the UK towards Hungary (keeping in mind that the British rebate has a significant negative impact on that) to the expected budgetary contribution from the outside, the latter could end up at somewhere the same level. Thirdly, Hungary enjoys good but not outstanding trade relations with the UK. Nevertheless, Hungary will seek to ensure that any European level agreement should provide the same level of trade benefits for both countries. The UK ran a trade deficit with Hungary (goods and services) in 2014, exporting £ 1.8 billion (0.8% of total export) while importing £ 3.1 billion (1% of total). The export includes mainly machinery and transport equipment (although the share of trade this makes up has fallen significantly in recent years), manufactured goods, chemicals and related products.  Hungary main export markets are Germany and Austria, with the UK standing at 9th place with 3.6% of total exports. When it comes to imports the UK is not in the top 10 countries.  As for financial and banking sectors, and the interests of the City of London, Hungary is dependent on credit from abroad, especially credit provided by the Eurozone. Hungary is not part of the EMU, but nevertheless a stable European fiscal and monetary environment is its primary interest. That is why a flexible agreement between the EU and the UK regarding the financial services market will get the backing of Hungary.

Ireland

As the UK’s nearest neighbour, and the only EU country with which the UK shares a land-border, Ireland arguably has more at stake in a Brexit negotiation than any other Member State. A protracted negotiation, and a UK outside the customs union, common commercial policy and/or single market, leaves Ireland with any or all of the following outcomes: disruption to investment arising from market uncertainty; trade disruptions and restrictive tariffs on agricultural goods and other produce; the certain return of a customs regime between Ireland and Northern Ireland; and the possible return, however unlikely, of passport controls at the Northern Irish border, which could have knock-on effects for the fragile Northern Irish peace settlement. The ideal for Ireland would naturally be an agreement that preserves critical aspects of today’s mutually beneficial relationship, and it is not difficult to divine two broad Irish priorities here: preserving the Common Travel Area (CTA) between the UK and Ireland, currently protected by a joint British-Irish opt-out of the Schengen zone; and limiting disruption to the €1billion weekly trade flows across the Irish Sea, particularly with respect to the agri-food industry, which accounts for about a third of Irish exports to the UK. In light of the political sensitivities, a convincing case could be made for the continuation of the CTA, though the practicalities of this unprecedented arrangement, especially in light of current attitudes towards migration and security, are quite another matter. Protecting the trade relationship and the interests of the Irish agri-food sector, meanwhile, would be a challenging task, and may amount to an exercise in damage limitation. There is, in general, significant overlap between Irish and British policy priorities, and if this were a bilateral negotiation it would be a short and amicable one. In a European Council setting, however, the varying interests – and dispositions – of 26 other Member States would have to be accounted for. Out of self-interest, enlightened or otherwise, some would see little incentive in giving the UK a favourable deal. By extension, it is deeply uncertain whether Irish interests could be protected against the disruptive impact of Brexit.

Italy

Italy might well adopt a pragmatic attitude and pursue its national interests, leaving aside other political considerations. The Italian government will want to avoid any deal that limits British access to the single market and which could negatively affect economic relations between the two. Indeed, Italy is the UK’s seventh largest supplier and trade relations between the two have been extremely positive, with Italian exports increasing by 7.6% in 2015. Yet, Italy will not overlook how the UK is also interested in maintaining positive economic relations with the single market. In this situation, Italy might ask to trade British access to the single market with concessions from the UK in the fields of security and migration. Italy might use the British exit to advocate the need for comprehensive reforms to the European political and economic system e.g. the need for differentiated integration among member countries which could allow a core group to integrate more at political and economic levels. To sum up, Italian input to UK–EU negotiation will  be based on national interests to maintain good relations with the UK while also boosting European integration.

Latvia

With the Brexit the Latvian government will face several major concerns in regards to UK-EU exit negotiations. First, regarding the security issues, Latvia considers the UK to be one of its most important security guarantors. This is a foreign policy priority, and will therefore be worried about the loss from the EU of one of its major foreign, security and defence players. Second, in relation to migration and the economy, Brexit will have a heavy impact on Latvian citizens. The UK is among the most popular destinations for Latvian migrants, many of them residing in the country permanently (but not necessarily with a permanent resident status). Free movement is among the most popular advantages of the EU in Latvia, and there is a fear that Brexit might result in considerable limitations to this. The same applies to the economic benefits for intra-European trade, although the UK is not among Latvia’s main trading partners. Third, politically Latvia is still strongly pro-European. And there is considerable fear that Brexit might trigger a domino effect in other eurosceptic countries. This reflects back on the Latvian security perception, with Latvia seeing EU membership (in addition to NATO) as a crucial security guarantee against potential Russian aggression. It is important to stress that the Latvian government has sought to accommodate the UK to keep it in the EU, for example by agreeing to UK exceptions from European integration. And Latvia will not oppose some say for a UK that is outside the EU on some individual matters of mutual concern for both the EU and UK. However, the government insists that any changes to the current structures of cooperation should be done in accordance with EU legislation and should be based on mutual interests and ways that safeguard the EU project.

Lithuania

Lithuania’s President has stated that no discriminatory policies should be applied to European citizens because freedom of movement is a core principle of the Union. The UK’s membership of the EU is of a great importance for Lithuania. Both countries have long-standing economic ties. Furthermore, with more than 100,000 Lithuanian citizens living in Britain the country remains among the top emigration destinations for Lithuanians. The UK’s withdrawal could leave them outside the Single Market, thus excluding them from commonly shared principles and rights. Their rights and standing in a non-EU UK would be a central concern for Lithuania. Any new UK-EU relationship could create a precedent for further such cases, especially at a time when new dividing lines have opened up across the EU because of the migration crisis. The refugee crisis, the terrorist attacks in Brussels and Paris, and ongoing problems in the Eurozone mean the EU is facing both political and security crisis which requires cohesion more than ever before.

Luxembourg

The Luxembourg government is concerned on almost all fronts with the implications of a UK withdrawal from the EU (except perhaps immigration). The most sensitive issue is financial services. Luxembourg will insist that the UK keep most of the EU acquis in order to maintain the free access to the single market for its goods and services. It would be worrying for Luxembourg if the UK were to establish more competitive/ less regulated rules in financial services. On financial services, especially the fund industry, Luxembourg will expect the UK to show equivalence of the rules and potentially accepting a certain degree of regulatory cooperation to be able to continue trading. Brexit opens the door to great uncertainty about how cross border investment continue with the EU. Brexit potentially means that the right to distribute and sell financial products in the European Union for firms regulated in the U.K. – so-called passporting – will be lost. The EU may enact legislation to force all euro transactions, including derivatives, to be settled in a euro zone country where the European Central Bank has daily monitoring powers. Some of the City of London’s finance specialist jobs could move to the U.S., while others might relocate to European capitals. Luxembourg is a strong contender, along with Ireland and Frankfurt. This might become an opportunity to strengthen its position in asset management.  Clearly, Luxembourg has an important bargaining chip here: it can insist on the UK respecting the acquis and EU financial regulations, or else threaten with lobbying the rEU and the Commission that all euro transactions be settled within a euro zone country. Luxembourg governments are almost instinctively pro-integration and pro-free trade due to the small size of the country. The current government is very concerned about the possible ripple effects of a UK withdrawal from the EU, and sees the EU endangered on many fronts, with the euro crisis, the Schengen crisis and the migration crisis. Damage limitation and adaptation are therefore the key words. The government has realised that there are countries who do not want to proceed with EU integration and is willing to accommodate those within the EU framework. However, talks have been held in parallel on a “core EU”. Luxembourg could be rather accommodating on most other fronts if the UK wanted the maximum option of free trade. It would try to work out the most comprehensive trade deal with the UK, but would insist on respecting the acquis. EEA membership would possibly be the preferred option. Currently, 6000 UK citizens live and work in Luxembourg. It is highly doubtful that visas would be required for them. However, and especially if the UK were to be difficult on reaching agreement with the EU over movement of people, UK citizens could find themselves treated as third country nationals and be subjected to the same procedures to get a residence permit and a work permit. The “preference rule” would not apply to UK citizens anymore, and employers would first have to demonstrate that no EU citizen could be found to do that job. This is a significant disadvantage for UK citizens, as their competition from French, Belgian and German commuters would be stiff. That said, financial service regulations would probably be the most important issue for Luxembourg. If the proposal on the table were unsatisfactory for the government, it would probably draw a red line over this issue.

Malta

Malta  is one of a group of EU member states which are most likely to be negatively affected by Brexit. The most exposed countries will be Ireland, Malta, Belgium, the Netherlands, Cyprus and Luxembourg, all of whose exports of goods and services to the UK are at least 8% of GDP. EU countries could gain from the shift of some FDI from the UK to the EU. However, countries such as Luxembourg, Malta, Belgium and Germany, with a large stock of FDI and financial assets in the UK, will suffer losses in the euro value of those assets in the event of a permanent depreciation of sterling. The assumption is that Brexit is most likely to trigger economic uncertainty and drive the value of sterling down. But what about the euro? Would uncertainty about the effects of Brexit not cause a downward pressure on the euro? A weak sterling would also hurt Malta’s tourist sector by making it more expensive for Britons to travel to the island. In 2015, 1.8 million tourists visited the island which has a population of 425,000 leaving an estimated €1.6 billion in the economy. Of these, 526,089 or 29.4% of total arrivals came from the UK. This is by far the largest group of inbound tourists by nationality. But there are other more ominous threats that may affect Malta negatively with Brexit. Take EU tax harmonization where decisions are taken by unanimity. Britain has so far slammed the breaks on harmonization and Malta’s tax regime has benefitted from this. But after Britain leaves the Union, it is unlikely that Malta will have the power and influence to successfully oppose further tax harmonization. Tax harmonization is strongly opposed by Malta in the Council of the EU and for good reason. It is considered as one of the factors that help attract foreign investment to the island particularly in financial services, online gaming and more. Apart from these tax related issues, there are several others which merit attention. For historic reasons, UK universities are the most popular amongst Maltese citizens seeking further study abroad. The Maltese pay the same level of fees as UK and EU citizens – and not the much higher ones reserved for third country nationals. But this is unlikely to continue once Britain leaves the EU – unless of course measures are taken to safeguard it as part of an eventual EU-UK Association ( or whatever) agreement. Similar arguments can be made in the case of health. A reciprocal health agreement between the UK and Malta allows UK citizens, particularly expats settled in Malta, to access the health services and Maltese citizens to obtain treatment in UK hospitals beyond what is offered under the EU’s European Health Insurance Card (EHIC) scheme. There are also close links between the Maltese and UK health professions and several Maltese health specialists work in the UK Health system and / or obtain their specialist training there. These ties could be seriously jeopardized if Brexit leads to Maltese citizens beginning to be considered as third country nationals. In the meantime the number of UK citizens applying to join the Medical course in Malta has been rising steadily in recent years without the need of much advertising since EU citizens do not pay university fees in Malta. Brexit could also slam this door shut, in which case the pressure building up on Malta’s Medical School would ease to the detriment of potential British applicants. The possible effects of Brexit have not sunk in the Maltese mind set which remains blissfully oblivious to the possible shakeups that it might provoke in Maltese society – depending of course on what kind of exit agreement Britain manages to negotiate. However, the authorities are well aware of the pitfalls and a strategy is probably already in place on how to deal with the most ominous of them.

Netherlands

The Netherlands is concerned about the implications of Brexit for economic and political reasons. The UK has a trade deficit with the Netherlands and Brexit could lead to new trade barriers with the single market. So Dutch exports could suffer. An additional negative effect is that much of Britain’s trade with the EU transits through the Netherlands (en route to Germany or beyond, and vice versa). The UK is also the third largest source of FDI in the Netherlands. Taken together this suggests that The Hague would be interested in offering the UK access to the single market. But this would not be a blank check. The Dutch government will likely demand Britain pay in to the EU budget in return for market access. Furthermore, the Netherlands will welcome Britain’s trade in goods, but services might be viewed differently. Changes to the European services landscape post-Brexit could benefit the Dutch: Brexit could push business services from the UK to the continent, including to the Netherlands. It could also lead to UK-based firms deciding to relocate (part of their operations) to Amsterdam or Rotterdam, cities that compete with the UK’s professional services trade. The Netherlands will push for guarantees that Dutch workers in London and elsewhere will not be disadvantaged. But the Dutch government might be more lenient than other member-states and allow for some British restrictions on the freedom of movement of workers. It is a concern The Hague shares with Westminster. The Hague was a fierce proponent of British EU membership in the 1970’s and so it might welcome the UK’s continued involvement in EU politics. But the Dutch will be wary of setting a precedent for ’a Europe à la carte’, and rewarding a British Leave vote with London’s ability to cherry-pick those parts of the Union it likes. As it faces a rise in eurosceptic sentiment at home, The Hague will want to avoid giving ammunition to those that seek a Dutch referendum on EU membership. Ultimately, Brexit will cause European countries to reposition themselves, and with Britain’s withdrawal the Netherlands will start to lean more towards Germany. Berlin, more than London, will shape how the Dutch approach the withdrawal talks.

Poland

Brexit will be a blow to the Polish government and its vision for Europe. The Law and Justice party needs friends who defend its domestic reforms in Brussels. It pushed through legislative changes, among other things, to media law and picked fights with the Constitutional Court; Brussels has worried that this could weaken democratic checks and balances and opened a rule of law procedure against Poland. The Polish government will likely go the extra mile to help the UK negotiate a good deal on its future relations with the EU. The Law and Justice party may also think that if it offers the UK a helping hand in the withdrawal negotiations, ‘post-Brexit’ Britain would subsequently return the favour. Warsaw has repetitively called for the permanent presence of NATO troops in Central Europe; would a ‘post-Brexit’ UK be willing to support these calls? In 2015 Polish exports to Britain amounted to around EUR 12 billion, making Britain the second largest importer of Polish goods and services. The Polish government will  most likely expect Britain to carry on with payments into the EU budget, albeit perhaps at lower levels, in return for the access to single market. But the single market is not only composed of free movement of goods, capital or services but also of free movement of workers. Unlike Britain, Poland sees the latter as one of the EU’s major successes, and would be reluctant to compromise on this principle if ‘post-Brexit’ Britain wanted full access to the common market. Poles make up the largest group of EU nationals living in the UK, with estimates surpassing 853,000 people. Some of them, those who have been in Britain for five years or more, would be eligible to apply for permanent residence if they wished to stay in ‘post-Brexit’ Britain. It is unclear, however, what would happen with the rest of the Polish citizens or their families should they want to come to the UK too. Warsaw would surely attempt to mitigate this legal uncertainty for its citizens, and would urge other EU member-states to make the protection of rights of EU citizens living in the UK a priority in the withdrawal negotiations. Here, the EU-27 would hold strong cards: around 1.2 million British citizens live elsewhere in Europe. Britain would struggle to obtain any legal protection for them if it did not offer the same for EU citizens residing in the UK.

Portugal

The economic and social ties between the two countries have been significant over the years. The UK is one of Portugal’s top trading partners, accounting for around 8% of its total exports (equivalent to 2.6% of GDP in 2013) and although Portuguese investments in the UK are small, more than 2,600 Portuguese companies operate in the country. Moreover, financial links between the two countries have traditionally been important. In recent years, the UK has even become the main destination of Portugal’s large emigration flows, with estimates pointing to between 120,000 and 350,000 Portuguese living currently in the country. In turn, around 2 million British nationals visit Portugal every year and more than 70,000 British citizens have their principal or secondary residences in Portugal. Brexit will entail significant costs and risks for Portugal. Portugal is more exposed . Lisbon will also lose a counterweight to balance other European powers and an important partner to promote more liberal and Atlanticist initiatives internationally. More generally, Portugal will  be affected by the damage that Brexit will do to the standing and prestige of the EU globally. In the context of a UK-EU exit negotiation Lisbon is likely to adopt a broadly positive and facilitating stance. Portugal will most probably push for close ties between the remaining 27 and the UK, namely allowing British access to the single market and freedom of movement to continue. In that sense, Portugal will possibly want to see minimal disruption for those areas and so push for a European Economic Area (EEA) style of arrangement with the UK. Moreover, Portugal will most likely seek substantial British involvement in the foreign and security policy of the EU, while continuing to emphasize the importance of a good relationship between the Union and NATO. At the same time, Lisbon will be reluctant to grant the UK any special privileges, particularly out of fear of feeding greater Euroscepticism and disintegration dynamics in Europe. While Eurosceptic political forces in Portugal have remained marginal, the Troika years have produced a more attentive and critical public opinion towards the EU. Finally, it should be emphasised that a negotiation under the current Portuguese centre-left minority government (supported in Parliament by smaller parties on its left) will probably lead to a more vocal stance than usual on any social issues.

Romania

Bucharest is very alert to the fact that the consequences of the overlapping economic crisis, migrant flows and consolidation of protracted conflicts in Europe’s Eastern neighborhood  may pave the way for a more inward looking political transformation of the EU. It is this situation – and especially that surrounding migration– that frames how Romania views Brexit. The strengthening of Eurosceptic movements across the EU represents a challenge for Romania, for whom the deepening of economic and political processes associated with European integration has exerted an overall positive influence on the dynamics and quality of Romania’s internal politics. Free movement will be a redline for Buchares. Continued free-movement as part of some new UK-EU relationship that sees the UK remain in the EEA, will be something Romania will push hard for. Continued free-movement to a UK outside the EU will therefore form part of the wider EU debate. EU policy planning on security issues is also likely to be changed, although cooperation between NATO and the UK in the defence sector is expected to continue. British influence in security crises such as Ukraine and the potential to support further pressure for sanctions against Russia, also as part of the transatlantic relationship, matter immensely for Romania as it searches for long-terms allies committed to the effective implementation of the Minsk II agreement with Moscow. Given existing divisions among Central and Eastern members on the sanctions issue, it is essential for Bucharest to partner up with like-minded states within the EU which are better positioned to support this policy inside the Union. A Britain outside of the EU will surely lose part of its political weight, in spite of its perceived close relationship to the US.

Slovakia

Brexit makes, EU politics more complicated. The EU Council is likely to be consumed by the consequences of a UK divorce. Existing divisions on policy questions are unlikely to disappear among an EU of 27 countries.

Slovenia

Due to its relatively small size and asymmetric relationship with the UK and other large EU powers, in the process of resetting EU-UK relations Slovenia will be in a weak position. It will be shaped by the positions of the UK and other large member states. However, negative public opinion of the UK in Slovenia will strengthen. This will put the Slovene government in an unfavourable position towards granting concessions to the UK.

Spain

Spain is locked in an inward attitude towards the future of the European Union. Except, that is, on the issue of migrants. On the one hand, Spanish workers living in Britain are concerned about their rights as regards social benefits and free movement. The Spanish government will have to renegotiate migrants’ rights in Britain as well as reciprocity in both social security systems. Last but not least, economic relations will also become a hot topic. While Britain is the first country of destination for Spanish foreign direct investment, Spain is the tourist destination par excellence with more than fifteen million visitors annually. Spain will never defend a ‘less Europe’ strategy for itself, but the Spanish Government will have to defend Spaniards’ economic and migration interests.

Sweden 

Sweden is one of the member states with most to lose from  “Brexit”. The reasons are pragmatic: Sweden and the UK tend to agree on issues such as free trade, the further development of the internal market and modernization of the EU budget. Adding to this, Sweden has strong bilateral ties to the UK with 8 billion euros worth of exports yearly.  But perhaps most important, the UK offers shelter for life outside the Eurozone, a position Swedes are keen to remain in. Without a big member state fighting (some) of its battles it will no doubt be more difficult for Sweden and other non-euro EU-members to balance the members of the common currency. Finally, as a non-member but ever closer partner of NATO, Sweden appreciates the role of the UK as a constructive actor in this realm. Sweden can be expected to play a constructive role during the ensuing exit negotiations. This does not mean that Sweden does not have interests of its own to secure: the city of Stockholm might try to attract some of London’s financial industries and step up the game in the competition over headquarters for global enterprises. On a political level, it has been argued that Sweden should play hardball in case of Brexit and deny the UK too sweet a deal, fearing that would unleash a domino effect and perhaps attract Swedish EU-sceptics as well. But geopolitical turbulence and perceived cultural proximity would likely trump these fears in a withdrawal negotiation. Sweden would still aim for a close bilateral relationship with the UK, a close relationship between the EU and UK and a UK that is engaged in European security.