Britain’s exit from the EU has left its smaller, wealthier nations feeling the loss of a weighty ally as they brace for a divisive fight over a new €1tn budget for the bloc.
“We are missing the UK as a big player and a close partner in those talks,” admitted Hans Dahlgren, Sweden’s Europe minister. “We have to work even harder to reach our objectives.”
Ever since Margaret Thatcher demanded her money back at the 1984 Fontainebleau summit, Britain could be relied on to lead the charge for a tight EU budget — even if its hefty rebates increasingly left other countries picking up the tab. Now Sweden, Britain’s closest partner along with Denmark, is having to fight for itself over its own budget rebate.
Brexit has shifted the EU’s balance of power, enhancing French and German influence and increasing the dominance of the eurozone countries. It has turned Britain’s closest EU allies into what some analysts dubbed “orphans” — smaller nations deprived of political clout and the UK’s large voting weight that was often crucial to passing or blocking EU legislation.
“Countries like the Netherlands used to hide behind the UK’s back, hoping it would be very vocal while representing Dutch interests too,” said Agata Gostynksa-Jakubowska of the Centre for European Reform think-tank in Brussels. “It was better to have another member state threatening a veto.”
The UK’s departure has forced the orphans to come out from under Britain’s coat-tails and defend fiscal orthodoxy, free trade, open markets or the Nato alliance in other ways. A diplomat from one of Britain’s traditional partners said it had immediately become clear that UK support would have to be replaced with new alliances, often shifting according to the issue.
“This is what we have basically been doing for the past three years now: talking to the other 26 countries and finding where we have similar views — and where we did not realise we have similar views,” the envoy said. “That has been a political priority.”
“They began to reposition themselves from the get-go,” said Brigid Laffan, professor at the European University Institute in Florence.
Sweden, for example, joined forces with Denmark, Austria and the Netherlands to demand a smaller increase in the EU budget — the “Frugal Four”.
Diplomats point to the growing sway of the so-called “New Hanseatic League”, a wider Dutch-led group of hawkish finance ministers including those from the Baltic states and Ireland. Its main achievement has been to scupper French proposals to bolster the eurozone on the basis they could lead to fiscal transfers from stronger to weaker members of the single currency bloc.
London’s departure unbalances what was often described as the “three-legged stool” of EU policymaking driven by Germany, France and the UK.
“Each of them would take their positions and then other member states would find their position somewhere in the triangle formed between them,” another diplomat put it.
The Dutch were always concerned about the dominance of France and Germany and saw Britain as a welcome counterbalance, said Rem Korteweg, at Clingendael, a foreign policy think-tank. The Hague “felt comfortable with the big three. The Netherlands was in the middle of the triangle. It was in a sweet spot and had good relations with all three.”
With Brexit, the Dutch “are almost on the periphery, which has translated into concerns about the EU becoming more protectionist and less Atlanticist,” Mr Korteweg added.
For some member states, the pre-eminence of France and Germany is all the more concerning because political paralysis in Berlin has allowed France’s President Emmanuel Macron to set the agenda, particularly with what officials call his “disruptive diplomacy” on subjects ranging from EU enlargement to the future of Nato.
Central and eastern European states are particularly concerned that the UK’s departure will lead to a softer stance on Russia. France, supported by countries such as Finland and Italy, is keen to improve relations with Moscow.
Mark Rutte, the veteran Dutch premier, has tried to build closer ties with fellow liberal Mr Macron just as his finance minister leads efforts to scupper French reform proposals — an example of the cross-cutting alliances smaller countries are now pursuing.
Ireland is the EU member with the most to lose from Brexit, given the scale of trade with the UK and the need to preserve the peace process in Northern Ireland. EU membership allowed London and Dublin to put a close but troubled relationship on a more even keel.
“It was a very comfortable position for Ireland with the Brits in. With Brexit, we really had to shake ourselves and ask where to position ourselves,” said Michael Collins, a former ambassador to Berlin and now director-general of the Institute for International and European Affairs in Dublin.
The UK’s departure forced Ireland to bolster other EU relationships. It has teamed up with the New Hanseatic League and doubled its diplomatic presence in Germany. Negotiations last year over the Brexit withdrawal agreement put Dublin, unusually, at the centre of EU decision-making.
Despite its distance on the western edge of Europe, Ireland has also been invited to join a meeting later this year of the Nordic-Baltic Eight, a regional grouping. “They said: ‘You don’t have the UK any more’,” quipped Leo Varadkar, Irish prime minister. “‘We don’t want you to be alone in the room’.”
