Brexit reinvents the Dunkirk myth

Stranded British and French soldiers captured by Nazi troops after the 1940 evacuation from Dunkirk. Winston Churchill cautioned Britons against seeing the operation as a victory. Courtesy Im

"Darkest Hour," the film portraying Winston Churchill as he takes the helm in a country teetering on the edge of submission to Nazi Germany, has been nominated for six Oscars, including for best leading actor and picture. The movie plays to a deep national sentiment that Britain can snatch victory from the jaws of defeat, portraying the ignominious evacuation of British forces at Dunkirk in 1940 as a triumph. In fact, the real takeaway is precisely the opposite.

Britain's checkered relationship with Europe since World War Two demonstrates a capacity to snatch defeat from the jaws of victory. That trait is culminating in Brexit, a decision that continues to roil the UK as Prime Minister Theresa May's grip on power looks ever shakier. The past week has seen growing pressure on her to quit and a dispute over a leaked government document putting hard numbers on potential damage to the economy as a result of Brexit.

Former Prime Minister David Cameron's recent remark in Davos that Britain's vote to exit the European Union was a mistake rather than a disaster is a modern reinvention of the Dunkirk myth. (In his speech after Dunkirk, Churchill himself cautioned that wars were not won by evacuations and that Britons should not "assign to this deliverance the attributes of a victory.") Before Cameron's ill-conceived and unnecessary referendum in 2016, Britain held the commanding economic and strategic heights in the European Union. The British economy was outperforming the euro area as the currency union struggled to recover from the debt crisis of 2010-12 that nearly tore it apart. Despite its reservations about the expanding reach of European integration, Britain benefited strategically from its influence as a big member state within the EU, which reinforced and enhanced its wider international standing.

The contrast with today is stark. Though Britain avoided an immediate recession following the Brexit vote, its economy now trails a resurgent euro area. British growth in 2017 was the slowest for five years despite the uplift from a more buoyant global economy. Mark Carney, governor of the Bank of England, has said that Brexit has already cost the British economy one percentage point of growth and that this loss will probably reach two percentage points by the end of 2018.

From a strategic perspective, too, Britain has lost stature as foreign governments rub their eyes at a country quixotically bent on weakening itself. Despite President Trump's attempt to smooth relations with May in Davos, Britain's relationship with America is now fractious rather than special. May herself is a diminished figure outshone within Europe by the new sun king, French President Emmanuel Macron.

The British knack of turning triumph to disaster in its relations with Europe goes back to the aftermath of World War Two, and is not confined to May's Conservative Party. In the late 1940s Britain had an unrivalled opportunity to shape a more united Europe on its own terms, concentrating on economic rather than political integration. But following the landslide Labour victory over the Conservative Party in 1945 the new government failed to seize the chance, focusing instead on securing American commitment to the economic revival and security of Western Europe. For his part Churchill, cast into opposition, hankered after Britain's past glory as a great power belonging uniquely to all three of what he sonorously called in 1948 the "three great circles" of America and the English-speaking world, Europe and the Commonwealth.

Eventually France took the lead when its then-foreign minister Robert Schuman proposed a coal-and-steel community that was in effect the embryo of the EU. Crucially, Britain decided to stand aside from this plan. In a lecture before the Brexit referendum, Vernon Bogdanor, Cameron's political tutor at Oxford University, called the day of the Schuman declaration – 9 May 1950 – "the most important date in the post-war history of Western Europe." Although Britain eventually boarded the European train in the early 1970s, it did so on terms already decisively determined by France and Germany that included the political vision of "ever closer union." And it did so as the sick man of Europe following two dismal decades of relative economic decline when Britain grew more slowly than the continent.

Even so, inside the bloc Britain gradually started to claw its way back, recovering lost economic ground by growing faster than its European neighbours. And armed with the clout of a big member state the British were able to score some notable wins. In particular, they were a driving force behind the creation of a single market in the late 1980s and early 1990s and secured an opt-out from the over-ambitious project of creating a single currency.

Now once again Britain is plucking defeat from these victories. Remarkably, the City of London had emerged as the currency union's financial capital even though Britain did not join the euro. That position is in jeopardy owing to Brexit as euro-zone countries led by France in particular seek to relocate financial activities in the monetary union. May is intent on leaving the single market that her Conservative predecessor Margaret Thatcher helped to forge in the 1980s.

Ardent Brexiters such as trade minister Liam Fox argue that Britain is once again embracing the wider world beyond Europe at a time when most growth will come from emerging economies. Yet Britain has long had the scope to do that within the EU merely by emulating the performance of Germany in these export markets. German firms, for example, outsell British enterprises by a wide margin in India, even though the British have the advantage of cultural and linguistic affinities together with political links through the Commonwealth. Britain may be able to cut new trade deals after leaving the EU, but it will have much less to offer than as a member of the union, and other countries will be ruthless in exploiting its new-found weakness.

"Darkest Hour" tugs at Britain's national sense of pride because the British had a good war, not just on the winning but the right side. Yet victory can have a sting. Jean Monnet, the architect of the Schuman plan and patron saint of European integration, memorably mused that Britain's abstention in the founding years when it was so much in its interest to join in was the price of its wartime success – "the illusion that you could maintain what you had, without change." What he could not have foreseen was Britain would pay that price a second time, by leaving.