The UK’s decision to leave the EU (European Union) has put the Union in an unprecedented crisis. The exit per se of such a large member state in both economic and population size is causing turmoil, and the accumulated discontent towards the current system of the EU during the euro-area sovereign debt crisis and refugee crisis has come to the fore due to Brexit. Backed by this discontent, political forces arguing for their own countries’ exit from the Union have also risen in other member states, and heads of governments of other major member states and EU institutions are rushing to propose reforms to the current system. The deepening and extending of the European integration since the creation of the European Coal and Steel Community for peace and prosperity in Europe right after the World War Ⅱ is put on break, and the uncertainty on the future shape of the EU has risen to an unprecedented level. This uncertainty is likely to cause troubles not only to the EU and its member states but also to third countries including South Korea in long-term decision makings at the levels of business, consumer and government, due to the Union’s importance in world economy and international trade.
  Against this backdrop, this report analyzes the problems of the current system of the EU, forecasts its future shape and derives policy implications for Korean government.
  Chapter 1 briefly follows the evolution of Brexit, sketches the importance of the UK within the Union and outlines the plan of this report.
  Chapter 2 analyzes the major problems of the current system in the following 6 areas: European identity; decision-making structure; economic divergence among member states; public finance; management of economic crisis; labor migration and refugees. Lack of identity, decision-making structure and migration-refugee issue are known to have had direct impacts on the spread of the public demand for exit from the Union, and economic divergence, public finance and crisis management have emerged as the major problems of the current system during the euro-area sovereign debt crisis.
  Finally, Chapter 3 categorizes possible shapes of future European integration and proposes 5 scenarios. Using the AHP method, it estimates the probability distribution among the 5 scenarios and derives policy implications for Korean government for each scenario.