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European Union Faces New Challenges Without The U.K.

ROBERT SIEGEL, HOST:

Last week's referendum has many people wondering what's next for Britain without the EU. Well, here's the other side of the same coin - what's next for the European Union without the U.K.? Hans Kundnani is a Europe watcher with the German Marshall Fund. And he says that while he's not sure that Brexit is a done deal at all, it's clear that reform is needed within the European Union. But, he says, there isn't agreement for how and what to change.

HANS KUNDNANI: The first question is whether what you need to do at this point is move ahead with further integration - in other words, further pooling of sovereignty from the national level to the EU level. Some think that's a solution. Some think that's precisely the problem and what you actually need now is a much looser European Union with what sort of EU nerds call variable integration - a sort of flexible EU of overlapping institutions and competences. I suppose the two real challenges for the EU on which I think the future of the European Union depends are the euro crisis and the refugee crisis. And in both cases, the EU at the moment is in this kind of in-between position where it hasn't fully integrated. There's resistance to going further with integration, but it also is very reluctant to go back.

SIEGEL: Is there a risk of the European Union weakening - or even to the point of unraveling - in the events that play out from the British referendum?

KUNDNANI: I think there is. During the referendum campaign, when I was asked this, I said no. I said actually, you know, the two big challenges for the European Union are solving the euro crisis and the refugee crisis. And because Britain is neither in the euro area nor in the Schengen area, actually, it's irrelevant to these questions.

SIEGEL: The Schengen area, we should say, is the area of travel without passport controls.

KUNDNANI: Exactly. But since the since the referendum a week ago, I've changed my mind about this. And I think there is now a real danger of the EU unraveling completely, not so much because of Brexit itself, but precisely because of the way that the rest of the EU agrees that there is an urgent need now to respond somehow to Brexit. But they can't agree on how to do it, and you see these fault lines deepening since the vote a week ago. And I could see a kind of dynamic whereby the whole of the EU starts to unravel.

SIEGEL: The history of - well, before it was called the European Union, the European Project. European integration...

KUNDNANI: Yeah, yeah.

SIEGEL: ...Has been very much a top-down exercise. Often very insightful and gifted elites are driving this process. And it's rare to see people or to hear people express, you know, a grassroots enthusiasm for the thing. How does it make people feel that what's going on in Brussels or Luxemburg or Strasbourg or wherever there's an EU city is happening in a way that's responsive to them, in the way that a democratic government is responsive to its people?

KUNDNANI: You're quite right. The EU has been a kind of an elite project. And often the response in the past when there have been attempts to ask the populations of individual member states what they think about a particular step in European integration, they've often rejected it. And the response of the European elites was often to simply repackage those steps in a different way. So out of the constitution which was rejected by the Dutch and the French voters - not British voters, but by Dutch and French voters - in other words, founding members of the EU. The response of the - of European leaders was to repackage that as the Lisbon Treaty, which then didn't require a referendum.

SIEGEL: Referendum - in other words, they didn't take the message on board in saying, well, we have to deal with that negative attitude. We'll find a way around it in some way.

KUNDNANI: Exactly. The problem is even if you do recognize you can't go on in the same way as in the past, it's still not quite clear what you do then because actually the logical conclusion of that recognition is, in a sense, to unwind the European Project. And that's something which European leaders are not yet prepared to do, partly because they believe in the European Project, but partly, also, because they're not quite sure how far the unraveling would go.

The fear is always - and this is the fear of Brexit, as well - the fear is you take one piece out - so, for example, one country leaves - or you revoke one piece in European integration, and then the whole project gradually starts to unravel. And so European leaders even now, I think, are very, very reluctant to think about going backwards in European integration because they think the whole project might fall apart.

SIEGEL: That's Hans Kundnani of the German Marshall Fund. Thanks for talking with us.

KUNDNANI: Thank you. Transcript provided by NPR, Copyright NPR.