Future Scenarios: Geopolitical Explanation of the Impact of the Brexit on the Monetary Unity of the European Union

Document Type : Original Article

Authors

1 PhD Candidate in International Relations, Islamic Azad University, Science and Research Branch, Tehran, Iran

2 Associate Professor in International Relations, Islamic Azad University, Science and Research Branch, Tehran, Iran

Abstract

Extended abstract
Introduction
The continent of Europe was the starting point of two World Wars. But after World War II, the two main former enemies, France and Germany decided to move away from the state of hostility and move toward cooperation. Although joint cooperation in the field of coal and steel began and gradually expanded to other areas, what was important were the areas and elements that encouraged cooperation and convergence and strengthened it over time. Cultural and value commonalities, the cost of war and hostility, the fear of a common threat, Soviet-centered communism, mutual needs for joint cooperation, the importance of the economic component, and etc. were among the factors that encouraged cooperation. The impetus for cooperation and expansion of cooperation and convergence to other Western European countries led to the continuous strengthening of unity and convergence. In fact, the success of cooperation in a sector caused that sector to become a unifying element and strengthen cooperation. Achieving monetary unity and having a single currency was one of those unifying elements. In fact, the economy played an important role in the emerging political community in Europe, and monetary unity was one of the dreams of European politicians before the formation of the European Union, an ideal that was recognized at the beginning of the 21st century in the European Union. The recognition of the euro as a common currency was realized.
Achieving a single currency played an important role in strengthening the European Union and the common sense of unity. Although countries such as Britain and Denmark tried from the beginning to avoid accepting the single currency, there was no escaping this fact. With the Brexit, Britain has officially separated from the euro and the common currency. Given the importance of the British economy in Europe on the one hand, and the importance of the Euro alongside the dollar, as one of the most important world currencies on the other hand, it is important to consider how the British withdrawal will affect European monetary unity. Where the future of the Euro will go with the UK withdrawing from the EU monetary union; an important issue that this article seeks to answer. This study, by extracting scenarios from the future of European monetary union, finds it more likely that the British withdrawal will lead to greater cohesion of the European Union and, consequently, to strengthen monetary unity.
 
 
Methodology
The research is qualitative and its approach is descriptive-analytic. Also, due to the nature of this research, the future research method and in particular making scenario is used. By considering independent and dependent variables, related topics are extracted and while coding, we record them in research sheets. In this regard, by referring to written sources and works of recent years, as well as interviews with elites, the method of information analysis is used.
Results and discussion
In this section, in the first step, the geopolitical foundations of the European Union are examined. In fact, this section examines the starting point of convergence and the importance of monetary unity. The second step examines the 2008 financial crisis, which sparked pessimism about monetary unity and highlighted the challenges as well as the weaknesses of the union's financial institutions. It also provided space for the formation of opposing currents of convergence. Then, in the third step, the impact of Britain's withdrawal from the EU on monetary unity will be discussed.
Conclusions
The UK's withdrawal from the EU which has always been opposed to monetary union has made it possible for the EU to move towards more cohesion and convergence with the focus on other top economies such as France, Germany and Switzerland. This paper considers this scenario to be the most probable scenario. Britain's special position in the European Union as a non-aligned member has led to more order and cohesion for the EU to leave. This cohesion seems more likely due to Germany's common desire as a European economic power on the one hand and France's desire as a political and military power on the Green Continent on the other hand. According to this scenario, the demographic potential of the euro area, which is 330 million, is itself a factor influencing the convergence and continuity of European monetary unity. Even with The UK's withdrawal from the EU, countries like Germany, Switzerland and France which have strong economies can have better markets in trade.

Keywords

Main Subjects


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Volume 18, Issue 66
December 2022
Pages 88-109
  • Receive Date: 02 January 2021
  • Revise Date: 09 February 2021
  • Accept Date: 03 February 2021
  • First Publish Date: 17 February 2021