Suddenly Brexit

The first SMS woke me up at five in the morning. It was Matteo Renzi, the Italian prime minister at the time, asking me if I had "more data". I immediately understood that all the calculations, the exit polls, the forecasts and the data of the previous night meant nothing.

Brexit had just happened.

It was at that time on 24 June 2016 that I realised, for the first time, a member state had decided to leave the European Union. I immediately spoke with my friend Ed Llewellyn, then David Cameron's chief of staff at No 10. He confirmed that what seemed impossible just the night before had indeed happened, represented by the smirk of Nigel Farage and the rejoicing of Michal Gove and Boris Johnson.

That day I was in Luxembourg for the general affairs council. Brexit was on the agenda: based on the forecasts, we were supposed to be evaluating how to 'reset' the EU in the event of a remain win. But our forecasts were wrong; foreign affairs ministers began to arrive at the informal breakfast before the council, now a pointless occasion.

I remember doing an interview with BBC radio. They asked me what was going to happen after Brexit. I got by with a standard answer, but the reality was different: we knew we were entering uncertain and unknown territory. London did not seem prepared to handle the situation, and neither was Brussels. Obviously, 'Euro-destroyers' from all over Europe were rejoicing and hoping to use the exploit the apparent momentum caused by the Brexit vote.

I had never imagined a member state leaving the EU. My first doubts arose in Stockholm, a month before the referendum when, during a Policy Network conference, my friend Roger Liddle confessed to me that he was concerned about the result. I trust Roger's expertise on British politics and society, and his pessimism concerned me.

On various occasions, I have had the chance to live in the UK. The last time was in 1994. Those were the years of Cool Britannia, during the explosion of Britpop, of Tony Blair and New Labour: an era brilliantly built up by one of the brightest minds in British politics, Peter Mandelson. After the dark days of the 1970s and the conflicts of the Thatcher years, Britain seemed to be undergoing something of a rebirth, its 'soft power' growing. London during the 1990s was innovative and 'happening', acting as a magnet to attract young people from all over Europe.

I was among those young people. I lived in Rosebery Avenue in Islington (20 years later 75 per cent of voters in Islington voted to remain; a small comfort). I studied at the London School of Economics and played squash with Indian and Pakistani friends. At the LSE, my macroeconomics professor was Willem Buiter, who later joined the Bank of England monetary policy committee. I remember he often wore a white T-shirt with the drawing of a European tie, blue with 12 stars, under a black suit jacket. Back then, more than two decades ago, his lessons explained the need to introduce the single currency; but, at the same time, it was already clear that the eurozone was incomplete. All these issues quickly moved from economics to politics.

I witnessed a London that was undergoing a renaissance. Now London is completely transformed: I recently went back to LSE for a conference. The squash courts are now the, construction site of a new student office. I am sure it will be beautiful but at least for me, squash courts were much more romantic.

I have one simple question: what happened to the Great Britain I remember clearly? What has changed in the intervening years to cause a majority of Britons to vote to leave the EU?

NO EUROPE FOR OLD MEN

Right after the referendum, one figure stood out to me. Those who voted in favour of Brexit were older British citizens. 73 per cent of people aged 18-24 voted remain, as well as 62 per cent of those aged 25–34. People over the age of 45 voted leave, with the figure reaching its peak at 60 per cent among those older than 65. But Brexit won because British grandparents turned out in larger numbers than their grandchildren. That's democracy: if youngsters had really cared about the referendum, they could have gone to the polls in larger numbers. We feel lost in the face of such a decision. The results are not only different between young and old, but also between the cities and the provinces, without forgetting the divisions between the nations of the United Kingdom, with Scotland and Northern Ireland voting to remain and England and Wales to leave.

However, this is a somewhat superficial representation of the split between one generation that voted for its past and another that decided not to participate, to let someone else decide the future. This is not the case: the young have demonstrated that they believe in the EU because they were born and raised as European citizens. Because most of them have travelled through Europe, many have studied in universities in the continent and have friends located all over the EU. This is the Europe generation, the Erasmus generation, the generation that discovered the continent thanks to low-cost flights: the easyJet generation. The same easyJet that decided to leave London and move to make the EU, in this case Vienna, its base.

I focus on the generational issue because it is clear-cut. The results of the referendum tell us that among those people younger than 45, remain won. This means that those who were born after Britain joined the European Economic Community (EEC) in 1973 support the EU. It was the baby boomers who decided to leave the EU. Maybe because they recall a past that cannot be recaptured, they prefer to wallow in the dream of a 'Global Britain' (to use the words of Theresa May). But, nowadays, if a European country wants to be global, it needs to be part of the strongest union in the world, not on its own. The risk is that, outside of the EU, 'Global Britain' becomes 'Little England'.

However, the easyJet generation now has a great responsibility: too many young people took the EU for granted, failing to defend it enough during these tough moments.

Take back control

So why did the majority of Britons vote for Brexit? It is no secret that an increasing number of citizens feel that the EU is distant, irrelevant and sometimes even the enemy. Other than the differences between generations, Brexit gained most votes from the poorest and least educated. These are the social classes that were most affected by the financial crisis, that most fear the effects of globalisation, and do not hear answers to their problems.

Indeed, nowadays many believe globalisation is the root of all evil. Though the reality is different: thanks to globalisation, the global middle class (taking as middle class those earning between $10-50 per day) has increased by 70 per cent in the past decade. In China alone more than 200 million people joined the ranks of the middle class, in addition to 63 million in Latin America.

The problem is that we cannot say the same for the middle class in the west. According to the International Labour Organization (ILO), 19 out of 27 European countries experienced an impoverishment of their middle class between 2008 and 2011.

We have already seen the consequences of this in the US: Donald Trump won the election because he gave voice to this sense of loss. We can say that the Obama administration created millions of jobs and rebuilt the American economy, but this is not the point. As Bloomberg's David Ingold suggests, the disappearance of manufacturing jobs has taken away certainty from the working class, as traditional white-collar roles have become automated or moved offshore.

While the American Democrats were praising the self-driving cars designed in Silicon Valley, Trump addressed the truck drivers afraid of losing their jobs. We saw how that ended.

This message was echoed in the power of the leave campaign's slogan: "Take back control". We have to take back control: control of our frontiers, of our currency, of our traditions. But first, we have to take back control of immigration. This is, without a doubt, one of the main reasons behind the victory of the leave campaign.

Leavers bet on a good number of unfounded promises. All the graphs and the statistics with which the remainers demonstrated that Brexit would greatly damage the UK economy were not worth a penny. The error of the remain campaign was failing to understand that the way people voted was emotional and irrational: not very British traits.

This was also a big mistake made by Cameron: he thought that a good campaign based on a deal with the EU would be enough to neutralise the extremists within his party.

I remember the various meetings I attended with Renzi: Cameron faithfully stuck to his belief that, with a good cost-benefit analysis, the rational British voter would make the 'right' choice. But after many years of Euroscepticism, that was never going to work: if you invest a lot of time attacking the EU and listing its defects, as many Tory remainers and the prime minister himself did during the renegotiation, then it is difficult to later convince people of the case for remain. On top of that, Jeremy Corbyn's behaviour did not help: his support for remain was, at best, lukewarm. This was critical: Brexit triumphed because of the great number of Labour voters that were won over by leave.

More than a year after the referendum, it is still not clear what the British government envisages for the future. For many months, Theresa May hid behind the meaningless 'Brexit means Brexit' mantra. In January 2017, the prime minister plumped for a hard Brexit and then sought a mandate by calling a snap election for June. But the resulting loss of her parliamentary majority meant the situation has not become any clearer.

What was sold as a decision to take back control has instead plunged the UK into chaos. I still think that Brexit will be bad for everyone, but the UK itself will feel the worst effects. On the first anniversary of Brexit in June 2017, the British economic fundamentals were stark: the pound lost 14.5 per cent of its value, inflation increased by 2.4 per cent, the real growth rate decreased by 2.7 per cent and investment decreased by 0.9 per cent. To adapt a famous saying: Fog in the Channel, Britain cut off.

Brexit and beyond

I will always remember the image of one of the spontaneous demonstrations held by thousands of youngsters in Parliament Square a couple of days after 23 June. They were waving blue flags with the 12 stars and they were singing Hey Jude in support of the EU.

We need to bear them in mind as we start to build the future. London is not the UK, Paris is not France and New York is not the US. It is enough to look at the last census, which revealed that a third of London's residents were born outside the UK and that the city hosts 270 different nationalities, speaking more than 300 languages. We would probably be wrong to think these young pro-Europeans fully represent the country. However, what is clear is that they deserve an answer, because the decision on the future relationship between UK and EU will be of more relevance to the easyJet generation than to their Brexiteer grandparents. According to a survey on the first anniversary of Brexit, 85 per cent of young people aged 18-24 want to retain the right to live, travel and work in the EU. But these rights of EU citizenship will not be possible with a hard Brexit. Their future is uncertain, so we must find solutions, both for them and for EU citizens living in the UK whose future is similarly unclear. Every time I meet London's mayor, Sadiq Khan, I cannot help but think of the words he said the day after Brexit. Addressing European citizens living in London, Khan said with great simplicity: "You will always be welcome here."

As of today, nobody is able to predict what will happen during the Brexit negotiations. We cannot say with certainty what the relationship between EU and UK will be, since it will only be finalised at a later stage. Britain and Europe are friends and important allies; they will always have close relations on many issues. These include security, an issue that needs co-operation, especially with the threat of terrorism, which knows no territorial boundaries. It can strike at London Bridge, during a concert in Manchester, on the Promenade des Anglais in Nice or the Bataclan in Paris. It leads to insecurity, with our communities living in fear and demanding protection. If we want to succeed in solving this crisis in Europe, we need London on board, even if the city is no longer in the EU.

Brexit will be complicated. There will be many obstacles to success and the possibility of a storm. As I have always said, the negotiation does not provide an opportunity but, if we use common sense, a chance to limit the damage. However, this does not mean that there cannot be any positive consequences. For Britain? No, for the EU.

THE EUROPEAN SPRING

Brexit. Trump's election. The loss of the constitutional referendum in Italy. 2016 was a year of political defeats. But 2017 opened with even worse prospects in sight. In the Netherlands and France, elections were threatening to mark the demise of the EU. A win by Geert Wilders' populists or Marine Le Pen's National Front would have threatened the very existence of the union. But, exactly at the moment of maximum peril, Europe has come back and found renewed momentum.

Was there a specific moment at which this happened? On 25 March in Rome, we marked the 60th anniversary of the signing of the treaty of Rome. It was a symbolic event, though more political than expected. The declaration of Rome, signed by the 27 member states (Britain was absent), is the EU's first political reaction after the annus horribilis of 2016. It is substantive and launches innovative themes such as, for example, the establishment of a social union. More generally, the celebrations in Rome acted as an occasion to relaunch Europe: marches and pro-European demonstrations took place in many member states; young people waved the blue flag with twelve stars. The celebrations were the occasion for the re-discovery of a sense of European belonging.

Then Emmanuel Macron came onto the scene. There was no trace of him on the international political radar up until recently. I have had the chance to know him for a while, first as deputy secretary general at the Élysée palace and then minister for the economy and finance. I remember very well the day he called me three years ago and told me he was going to leave the Élysée to rebuild France. He wanted my help. This caught me by surprise. He asked me for suggestions of people to involve in his project. When I first met him at the ministry for the economy and finance, I found that he had chosen a student of mine at the College of Europe, Clément Beaune, as counsellor for European Affairs. He is a young man of the easyJet generation, bringing his pro-European vision to the Élysée palace.

Macron has had a stunning career, it goes without saying, but few predicted he would win the presidential election. As I wrote the French edition of this book, I was sure Macron, who at that time was deputy secretary general at the Élysée, was a young man to watch. I was convinced he was going to be part of the new generation in power. But when he left the Élysée, I had my doubts. I did not doubt him, because I know him. Macron has a great ability to predict political movements in advance and he is not afraid to make clear-cut decisions. My doubts were based on my knowledge of the French political system, and the fact I know the 'third way' in France is dangerous. But Macron decided to take the plunge and go his own way. He had the intuition to see a system in crisis, one that was slowly fading away.

Macron surprised everyone. He bet on a heavily pro-European election campaign, the likes of which we have not seen since Giscard d'Estaing. He was brave enough to face Marine Le Pen head on. He didn't let her set the agenda or give a nod and a wink to the National Front supporters. Instead, he laid out his own political agenda and he was proven right. His grand entrance at the Cour du Louvre to the strains of the Ode to Joy, as soon as his victory was assured, is one of those scenes that will always be remembered by France, and by Europe as a whole.

What does Macron's victory teach us? Not that all of the EU's problems have been solved. It will not be easy for the new president to carry through reform agenda, in France and, more generally, in Europe. He will find many obstacles along the way, because French society has conservative roots, and, above all, because the EU is slow moving, curbed by vetoes and the political calculations of its members.

However, Macron's election is a fundamental step towards the launch a new path in Europe. Not only did France reject a Europhobic candidate in the form of Le Pen, it also turned down François Fillon, who is lukewarm towards the EU. The country chose to bet on the EU, choosing faith, optimism, openness and innovation. The fact that this has happened in France, a country historically jealous of its national prerogatives, signals that an overhaul of the EU is not only possible but also probable.