Military-Security Impacts and Consequences of Britain's Exit from the European Union

This article examines Britain's exit from the European Union and its immediate impacts and potential military-security consequences for Britain, EU defense-security organizations, NATO, the United States, and the balance of power in Europe. In the first section, the opposition of British generals to their country's exit from the EU, military budgets, the decline in the stock values of defense companies, and fluctuations in arms transactions are discussed. The earthquake resulting from Britain's decision to leave the EU and its political and economic aftershocks have created an atmosphere of uncertainty, ambiguity, concern, and a sense of instability within the society of this country. David Cameron's resignation from the premiership in October of this year, the escalation of internal conflicts within the ruling Conservative Party and the main opposition party, the Labour Party, the possibility of another referendum in Scotland for separation from the United Kingdom, and the actions of several major investment banks in London, such as Citigroup, Bank of America, Stanley Morgan, and Goldman Sachs, to relocate their banking operations outside the UK, are some immediate results of this country's exit from the EU, known as 'Brexit.' Meanwhile, the potential consequences and effects of this exit on the defense, security, and military industries of Britain and the EU, as well as NATO, cannot be overlooked. Scotland's separation from the United Kingdom will have adverse effects on Britain's defense capabilities, and the dismantling of the Faslane naval base, located 40 kilometers west of Glasgow, which houses the country's nuclear submarines equipped with ballistic missiles, will be another consequence of Brexit. The opposition of British generals indicates that military leaders in Britain wanted their country to remain in the EU. Four months ago, in late February, thirteen retired British generals warned in a letter to the Daily Telegraph that Britain needs to remain in the EU to better secure its national security and protect itself against 'serious security threats' from ISIS and Russia. The generals stated that Europe is currently facing a series of serious security challenges, including instability in the Middle East, the emergence of ISIS, and the resurgence of nationalism and aggression from Russia, and therefore, Britain has no choice but to grapple with these challenges, either alone or through the EU, with the latter being significantly better for Britain. 'By remaining in the EU and cooperating and coordinating with its other members, better results can be achieved, just as with the EU sanctions against Iran regarding the nuclear issue, which brought Iran to the negotiating table, and Russia had to incur costs for its attack on Ukraine.' Six weeks before the referendum, in early May of this year, five former NATO secretaries-general described Britain's exit from the EU as equivalent to aiding the enemies of the West in a message published in the Daily Telegraph. However, a week before the referendum, Field Marshal Lord Charles Guthrie, the former Chief of the UK Armed Forces, who was among the thirteen generals advocating for Britain to remain in the EU, changed his previous stance and deemed the exit preferable. He told the Daily Telegraph that the plan to form a European army could harm NATO - a plan that was signed by EU countries based on the 'Common Security and Defense Policy' after the Lisbon Treaty in December 2007 and was implemented two years later. This senior military figure further stated: 'Such an army, which is intended to be formed more for political rather than military purposes, will be costly and unnecessary, and I consider such a force detrimental to the British Army, and thus I changed my opinion.' Notably, had Britain remained in the EU, it could have vetoed the formation of such an army. Military Budget With Britain's exit from the EU, the military budget of this country will also be subject to changes. According to Malcolm Chalmers, Deputy Director of the Royal United Services Institute (a British military think tank in London) and a former advisor to defense ministers, in the short term, the reduction of Britain's defense spending after Brexit will continue to varying degrees, but in the long term, the defense budget will depend on the country's economic performance and, more importantly, who will occupy the premiership in the future. In any case, a review of security and defense policies and a reassessment of the country's military spending plans for the next decade, along with fundamental changes in Britain's national strategy similar to the country's withdrawal from East Suez in the late 1960s, will be inevitable, especially if the projected growth in GDP for this period, which some economists consider likely, does not materialize. Military Industries, Decline in Stock Values The aerospace, defense, and security industries in Britain, which generate nearly £56 billion annually, wanted Britain to remain in the EU. The aerospace sector alone generates an annual income of £29.2 billion, with 91% of its products exported abroad. Nearly 11,000 people work in this sector, and the average salary of an employee is £26,500 per year, which is fifty percent higher than the national average. According to a survey of companies in this sector, nearly 86% opposed Britain's exit from the EU, and only 2% of the 900 members of these industries who participated in the survey supported Brexit. Free trade, the absence of cumbersome regulations, and the lack of tariff barriers, as well as the hassle-free hiring of skilled European and non-European experts when necessary, were among the main reasons for most companies wanting Britain to remain in the EU. British defense experts believe that Brexit could alter military procurement from Britain and scatter military cooperation and transactions with other countries. Furthermore, this will force defense and security companies to reassess their strategic objectives. Overall, Brexit will disrupt Europe's strategy in terms of investment and participation in defense sectors. Before Brexit, in the first two weeks of June, the stock value of Italy's Leonardo aerospace company fell by 15%, Sweden's Saab by 6%, and France's Thales by 8%. In Britain, the stock values of the country's largest defense company, BAE Systems, and Cobham fell by 2%, and that of Kinetic by 6%. The stock values of American companies Lockheed Martin, Northrop Grumman, and Raytheon fell between 2% to 5%. These American companies, along with Boeing and General Dynamics, have special offices in Britain and, in most cases, pursue their transactions with other European countries through these offices. Given the efforts of Eastern European NATO member countries to strengthen their defense capabilities and thereby create a suitable market for military sales, it is likely that many of these companies will relocate their offices from Britain to other EU countries. Airbus had previously announced that it would review its investments in Britain if Brexit materialized. Fluctuation in Defense Orders Britain is one of the world's major military equipment exporters, holding 31% of total arms sales from EU countries, while France holds 26% and Germany 17%. The decline in the value of the pound and the euro against the dollar could disrupt the procurement orders for American-made weapons, including F-35 aircraft (a fifth-generation multirole fighter jet manufactured by Lockheed Martin). The F-35 has already been ordered by several European countries, including Britain, Italy, and the Netherlands. Meanwhile, a decline in economic growth in Britain or the EU will have negative effects on their defense budgets. Conversely, the decline in the value of the pound against the dollar, which has reached its lowest level in thirty years, and the decline in the euro against the dollar, if continued, will strengthen European defense industries in terms of exports compared to similar industries in the U.S., while at the same time, as mentioned above, will increase the price of American weapon exports to Europe. Britain plans to spend $52.6 billion on defense this year and to raise the total spending between 2017 and 2022 to $310 billion. The negative effects of Brexit, if persistent, could disrupt the implementation of several of Britain's defense projects and even have negative effects on European defense sectors. NATO is determined to strengthen cooperation among its member countries and to integrate a significant portion of their military equipment, and in this context, Brexit could complicate the implementation of some NATO plans, including the production of the Eurofighter Typhoon, which is being developed in collaboration with Britain, Germany, Italy, and Spain.