To leave or not to leave? A lot of suspense has been building up on the decision that the British people will make on 23 June on whether to remain in the European Union or go their own way. The whole issue has kept political decision-makers not only in Europe but in the US and Asia busy envisaging contingency actions in case the Brexit camp wins the day and taking tour warning British voters about the direr consequences of a "Leave" decision for Britain, Europe and - accordingly - to the global economy and geopolitical stability.
While volatility has taken hold of the London and European stock markets, observers are now considering that the US Fed will postpone any new decision on an increase of interest rates after being able to assess the impact of the British decision. The latest polls showing the "Leave" campaign gaining some ground and being now one point ahead of the "Remain" camp has sent the pound to a new low against the dollar.
While the latest polls are showing the outcome of the vote as too close to call, the general assumption is that if the British voters were to listen to their guts and heart they will opt for Brexit but if they end up listening to their head they will vote to remain in the EU. However, that a country basically enjoying the best of both worlds - benefiting from the Single Market while opting out from the euro and from some of the most rigid constraints implemented by Brussels on social and labour issues or migrants - is so much torn apart about its belonging to the European Union is in many ways an illustration of the growing difficulties of the European project to captivate the hearts and minds of the people.
Of course, there is the enduring, traditional, British ambivalence towards Europe coming out even more forcefully than ever with the debate on the 23 June referendum. However, one cannot ignore the fact that everywhere inside the European Union every survey over the last few years has been showing a decline of public support for the process of European integration. Of course one can see there the impact of the dire economic crisis in which the euro zone and most of Europe has been trapped since 2008: The total economic output of the euro zone is today still lower than what it was in 2008. The inability of European leaders to restore prosperity and prospects for a better future and then their disarray and ineptitude in face of the migrant crisis did not do anything - to say the least - to create faith and confidence on the capacity of an integrated Europe to secure a decent future for its citizens.
This being said, the present situation is also in large part the result of the increasing perception among the public of European integration as a process led by big business and political elites and by a Brussels bureaucracy ensconced in its bubble. Of course one can say that European integration in itself is a contemporary necessity brought by a new economic and geopolitical landscape in which it is very difficult to have a voice if you don't have critical mass. But there is not anymore any "dream" element in what has become insidiously just a case of "we would be worse off if each of us was on its own". The dream element - which may have existed in the early phases of European integration - has been drowned in a flood of sometimes ridiculous or absurd regulations and the gradual encroachment on national sovereignties more difficult to accept by a frustrated public feeling that it is less and less in control of its destiny. No project of this magnitude can be undertaken and can be successful in the long-term without some dream element in it, some public aspirational expectation sustaining it.
This context explains the huge anxiety around the outcome of the British referendum. A Brexit decision - or even a wafer-thin majority for the "Remain" camp - will not only crystallise the malaise about the process of European integration way beyond the UK. It will also provide a very significant boost to the populist movement which has been sweeping Europe (but not only Europe!) and which is today a Sword of Damocles hovering over the heads of most European leaders and limiting their margin of manoeuver. And the common feature of all these populist movements, be they from the right or from the left, is their profoundEuroscepticism.
In case of Brexit, expect European leaders to express immediately their will to protect the EU and even to stress again the need for closer integration among its members; expect them also to take a strong stand against a leaving Britain, not only as an expression of their anger to the blow dealt to the EU but also as a message to some lukewarm members that exit involves a huge cost. It might not come to that: Conventional wisdom still holds - despite the latest polls - that at the end of the day rational calculations and the fear of uncertainty will prevail over gut feelings for many British voters once in the voting both. Warnings of a deep recession, of economic and political isolation have been proliferating as we get closer to 23 June and gaining in stridency. In the case of a Remain outcome, expect of course huge sighs of relief, exuberance in the stock markets and solemn political statements about Europe on its way to a great future.
It would however be a tragic mistake - whatever the outcome of the 23 June referendum - for European countries and European leaders to think that they can avoid a deep soul searching about what has gone wrong with the process of European integration. Europe has been lurching from crisis to crisis over more than ten years now, becoming more and more dysfunctional and - to a large extent - more and more alien to public aspirations. Calls for a greater integration will not do and will probably even aggravate the alienation of the public. European leaders might rather ask themselves why they have failed so miserably to associate the notion of Europe with the notion of hope… And what they could possibly do to re-connect these two notions.
The writer is the president of Smadja & Smadja, a strategic advisory firm
Twitter: @ClaudeSmadja
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
