Whatâs a small EU country to do about Brexit? Big players like Germany, and those with huge expatriate populations in Britain such as Poland, have leverage in the negotiations. Small countries, and regions like Flanders in Belgium that are heavily exposed to the whims of the British economy, do not.
The Netherlands, Denmark and Ireland met today in The Hague to flesh out how to prevent their liberal trade instincts being railroaded in the post-Brexit EU.
Denmark has also separately started reaching out to other national capitals to construct a range of post-Brexit alliances.
Estonia is planning even further ahead.
From POLITICOâs discussions with Estonian officials in Tallinn this week, the country of 1.3 million is being brutally honest with itself about what Brexit means.
On the upside, ministers and officials are grateful they donât have a loud set of Estonian interest groups to manage and represent in EU meetings on Brexit. The Estonian diplomat in the room can afford to pick their battles, and work as a neutral or mediating force. Estonia will also hold the rotating EU presidency for six months from July, giving it a voice in shaping the crucial opening months of negotiations.
On the downside, Estonians are forced to plan much earlier than others on how to cope with Brexit. Take infrastructure investment, for example. Up to 90 percent of such long-term investments in Estonia rely on some form of EU funding.
While Estonian officials insisted that the EU is âremarkably unitedâ when it comes to ensuring the U.K. pays what it owes on departure, they donât expect any of that cash to find its way to Estonia.
The current seven-year EU budget period ends in 2020, and the budget that replaces it could be â¬10 billion a year smaller. It will likely also require a bigger contribution from Estonia, whose economy has doubled in size since it joined the EU in 2004.
Given a blank budget balance-sheet, Estonia could fill that hole itself. However, it is one of the few governments in the world that doesnât issue government bonds: the result of Estonian law requiring a balanced budget.
Being debt-free makes Estonia an EU poster child of fiscal discipline, but it doesnât help it build high-speed rail lines or allow it to make up Brexit solutions as it goes along. Merely reacting to the negotiations would be âcompletely wrong,â said one senior official.
Estonia sees its future based on open trade, and efforts (often digital) to increase productivity and competitiveness. Like several smaller, more liberal economies, it hopes the emerging âmultispeed Europeâ will allow it to punch above its weight.
Ironically for countries that oppose Soviet-style economic planning, the lesson they are taking from Brexit is that those who plan, win.
This insight is from POLITICOâs Brexit Files newsletter, a daily afternoon digest of the best coverage and analysis of Britainâs decision to leave the EU. Read todayâs edition or subscribe here.