Brexit domino effect: Four countries tipped to follow UK out of EU in catastrophic move

At the end of May, France and Germany announced they are backing the creation of an EU bond to raise €500billion (£447billion) to boost the European economy, severely weakened by the coronavirus pandemic. The two leaders, Emmanuel Macron and Angela Merkel, unveiled their proposal in a joint video press conference. If approved, it would be the first time the bloc has pooled its debt in this way.

The measure immediately raised objections from the Netherlands, Austria, Denmark and Sweden, known as the “Frugal Four”, who support the establishment of a one-off emergency fund but do not back debt sharing or a significant increase in the EU’s next seven-year budget.

These four countries regard “mutualised debt” as a mortal danger because it would open the door to the dreaded Eurobonds – meaning Dutch, Swedish, Danish and Australian taxpayers could become liable for the debt of other countries.

The pressure that the pandemic poses on the EU as a whole might work in favour of the Franco-German joint proposal, though.

Andrew Watt, head of the unit for European economic policy at the Hans-Böckler Foundation, said: “The Frugals, on paper, have a fairly strong position in the sense that this whole thing is located within the European Union budget.

“In practice, though, none of them want to go down in the history books as the country that, faced with a pandemic, after all these countries have gone through, let them starve.”

The plan is, nonetheless, a dangerous step as according to Pepijn Bergsen, a research fellow at the London-based think tank Chatham House, it might spark a Brexit domino effect – at least, in attitudes towards the bloc.

In an entry for the London School of Economics (LSE) blog, he wrote: “The similarities with previous British positions in the EU are clear.

“The Frugal Four Prime Ministers value their rebates as much as Margaret Thatcher once did.

“It is not too much of a stretch to say that the current proposal would never have even made it to the table had the United Kingdom still been a member of the EU, as London would have almost certainly vetoed it.

“One of the arguments often put forward in favour of Brexit was that the UK should leave before it would inevitably get roped into the eurozone’s mess.

“During the euro crisis, the UK largely avoided this fate, only contributing to the bailouts of Portugal and Ireland.

“But having to pay for economic support for the southern euro countries is exactly what is now being asked from non-euro countries like Sweden, Denmark and Czechia.”

Moreover, Mr Bergsen argued, the comparison with the UK is also instructive because the Frugal Four were often closely aligned with London in EU debates.

They broadly share the British focus on free trade and on the EU as an economic project, as opposed to its political dimension, as Germany more often tends to focus on.

The academic noted: “Just like the UK, the Frugal Four also tend to have relatively eurosceptic electorates, albeit ones that continue to indicate in polls that they would vote to remain in the EU if asked.

“The COVID-19 crisis has drawn attention to Italian voters and their disillusionment with the EU caused by the lack of support they experienced during their time of need in this pandemic.

“As Catherine de Vries, a preeminent scholar of public opinion on European integration showed on this blog, this does not mean they necessarily want to follow the UK out of the EU.

“If anything, they are instead asking for more Europe, in part out of dissatisfaction with the functioning of their own democracy.”