That claim has come from right-wing, UK-based think-tank the Centre for Policy Studies in a report, titled The Existential Challenges Looming for the EU.
The CPS, which describes itself as having been founded by Margaret Thatcher in 1974 to ‘think the unthinkable’, said there might be some temptation to give the UK a poor deal on Brexit to discourage other states from leaving the EU. However, it continued, “both net contributor and net receiving countries will be keen for a deal to be agreed that softens the blow from the UK ceasing its full net contributions”.
“The UK's security and defence capabilities are also required by many European countries,” it added.
The report said that in the longer term, failure to reach a deal between the EU and UK “would likely exacerbate many of the EU's existential challenges, rather than reduce the risks associated with them”.
“A ‘no deal’ scenario would have consequences for the EU's financial stability and would significantly ration resources, not to mention have a huge impact on many of its exporting industries.”
Media comment in Britain had centred on the weakness of the UK’s negotiating hand in the Brexit talks, the report continued, but “there appears to be far less scrutiny about the EU's negotiating position, which faces, perhaps, long-term ineradicable existential challenges”.
Among the problems it counted the EU as facing were the possibility of an Italian sovereign default, the International Monetary Fund’s continued refusal to contribute to Greece's bailout until debt relief is agreed, high youth unemployment in Greece, Italy, Spain and France and rising euroscepticism across the continent.
The CPS said any moves towards fiscal union for the eurozone were “likely to be unpopular in donor countries”, while the influx of refugees into Europe last year had created tensions with some countries in the continent’s east refusing to accept new arrivals.
