Like Greece, Spain and Germany before, Britain now faces a cathartic moment when she needs to decide what price it is worth paying to stay in the European Union. Coolheaded rationality must prevail over emotion in the debate that is about to begin.
Much has been written these days about 'Brexit' after PM David Cameron's speech last week on Europe, which was indeed a game-changing event in so far as it potentially opens up a real in or out choice for the UK to leave the EU in 2017.
Among those who find it backward looking and those who find it dangerous as the uncertainty about an exit may impact on British investments during the next five years (see here), I argue that both arguments are right - but there is a German saying that nothing is eaten as hot as it is cooked. Five years are an eternity in politics.
Obviously, with this speech, the ‘exit-camp’ among British Conservatives is riding high. But this should be the moment when counter-arguments are built up - and normally this is just a matter of time. The City will eventually wake up and realize that it may lose its standing as the most important stock market in the European time zone, if regulatory and political authorities move to the continent (Brussels, Berlin, Frankfurt) in the wake of a deeper integration of the Eurozone, as Euroland pursues the path of a genuine, deep economic and monetary union. British youngsters are mostly in favour of remaining in the EU and at some point they will also voice their vision of a European future. So there is hope for the UK of a genuine and rational discussion, with facts and figures about the cost of staying and the costs of leaving, in the not too distant future.
Another key element is that very soon British industries will no longer be able to afford being in denial about the real economic situation in the UK, which is far worse than many in the UK have yet recognised. Not only has the pound dramatically lost value over the past five years, but the UK now has a deficit more than twice as high as that of Italy. In terms of GDP, the UK has not only been outperformed in recent years by Germany or the US, but did even worse than most of the Southern European crisis countries, bar Spain.