Europe is neither one thing nor another – it is not a federal nation, and it is not just a collection of independent sovereign states. But the European experiment has to head in one of these directions to repair Europe’s democratic deficit.
A far worse fate would be maintaining the disheartening and inefficient status quo.
It is disheartening, in that it does not foster the europhile passions needed to create a political community – consider the rise of eurosceptic sentiment across Europe, partly linked to the handling of the Greek crisis.
It is inefficient, in that it fails to address the most pressing crises: immigration policy, inequality, unemployment, environmental damage, and monetary policy
More importantly, the status quo offers the people of Europe a flawed form of democracy. Every democracy is flawed, but democracy in the Union is more flawed than democracy in any of its constituent parts.
European countries need quickly reject this status quo, and that means choosing between the federalist and statist options – the former much harder to achieve than the latter.
Britain’s ambiguous place in Europe supports this dismal stasis. By being part of the Union without backing it wholeheartedly, it compromises its state sovereignty without fully wanting to do so. The European Union gains much of the power to act, but little of the legitimacy.
For Britain, Brexit would mean a recovery of all its powers as an independent, democratic, sovereign nation state.
It would not necessarily mean making its borders more impenetrable to foreign individuals or to foreign capital. Britain has never been a part of the Schengen area, and there is no reason why the free movement of capital should shut down – both sides would have much to lose.
A British vote to leave the Union would activate article 50 of the Lisbon Treaty. Under that article, the Union would “negotiate and conclude an agreement” with the leaving state, “setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union”.
The terms of that framework would surely ensure a continued and strong financial and trade interaction between Britain and the EU. Neither party would have an interest in restricting capital mobility – London would likely still act as the conduit by which European savings and borrowings engage with the global markets.
And, as the UK would now have more control over its own laws, one can imagine the current Conservative government unilaterally passing legislation that would aim to boost the financial sector – provided it met the European regulatory “equivalence” standards that Switzerland, Japan, and the US all largely meet. Britain would do everything in its power to remain the financial centre it is today and to remain just as open to the world.
For the rest of Europe, Britain’s departure would mean a jolt into action. Europe would find itself in a deep crisis, losing one of its members for the first time in its history.
The people of Europe would have to seriously consider what they want from the EU. Britain’s withdrawal from the Union could encourage others to reclaim their full sovereignty at state level, just as it could encourage some of the remaining member states to form a union that would be closer and fuller than ever before.
Either way, it would help Britain and the EU emerge from the democratic malnourishment that is gnawing away at the states of Europe.