The European elections Theresa May never intended Britain to participate in are now only two weeks away. They are inevitably being fought as a proxy contest for Brexit by all the political parties. The results will be interpreted as a verdict on Brexit too, just as last week’s English local elections have been, and probably in much the same careless way.

Yet it would be a stretch to pretend that, for once in our recent history, the UK’s European elections are actually focusing on Britain’s and Europe’s place in the 21st-century world. The truth is far less flattering. These elections can better be understood as another episode in the national – and, in particular, Conservative – trauma over the historic decline of British power, of which the referendum was an interim climax. The elections are therefore unlikely to be cathartic or cleansing. On the contrary, they are dragging us deeper into the ongoing psychodrama that was intensified by the vote in 2016.

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This Brexit argument cannot be escaped. Parties and leaders have to engage with it. But the longer that goes on, the further this country gets from any attempt to make a sober, forward-focused judgment about the realities shaping its modern existence. So fierce is the argument about Brexit that we risk failing to see clearly enough the damage Britain is doing to itself, whatever the short-term outcome of the battles that currently obsess the parties and their activists.

Some glimpses of that damage were rehearsed on Wednesday in front of the Commons Brexit select committee. “We have become toxic” the Labour MP Stephen Kinnock, who supports a soft Brexit, told his colleagues. Traditional allies in the EU are no longer “prepared to bend over backwards,” said the veteran pro-European Charles Grant. And the former British official Jonathan Faull gave the committee the most withering verdict of all. Britain was once seen as an “awkward but constructive ally”, but now “this stable, rational country seems unrecognisable to many watching us – and there is no going back”.

Nobody who has had any contact over the past three years with a British or foreign diplomat can dispute the truth of that. Whatever the rights and wrongs of the 2016 decision, it is simply the case that the rest of the world takes Britain less seriously as a result. But it is not just the 2016 decision that feeds this perception – it is also the way Britain has responded to it. This process is getting worse, not better. What is more, all the possible next moves in the UK crisis – a cobbled-together softer Brexit deal between the Conservatives and Labour, a fresh attempt to topple May – will make it worse again.

These problems will continue if and when we finally reach “post-Brexit”. It is hardly surprising that such little critical thought has been given in recent months to the practical meaning – if there is one – of the “global Britain” conceit beloved of Conservatives. But there is a similar vacuum when it comes to rational discussion of any of the alternatives, including Jeremy Corbyn’s post-Brexit foreign policy.

So, when an event like Iran’s suspension this week of parts of its nuclear deal occurs, or when an issue like Huawei’s future role in British national infrastructure reaches boiling point, it becomes apparent that Britain responds on autopilot. On Iran, Britain remains caught in its own corridor of uncertainty between the contrasting responses of its European and American allies, while on Huawei it is trapped between its increasing engagement with China and the age-old temptation of refighting the cold war.

In neither case does Britain respond according to a thought-through, 21st-century assessment of its own power, interests and values. Instead, it too often takes refuge in a combination of postwar habit and intellectual vacuity. The consequence is that the country is quite poorly equipped to understand where its own best interests lie.

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Last month, from within the heart of the Whitehall establishment, the deputy director of the Royal United Services Institute, Malcolm Chalmers, published a rigorous and fascinating critique of one aspect of this – the current government’s claim that Britain is dedicated to upholding what it calls the “rules-based international system” (RBIS). The phrase crops up all over the place in May’s and her ministers’ speeches – 27 times in the 2015 strategic defence and security review alone, while in one recent speech, Jeremy Hunt cited the RBIS in six widely different contexts.

Yet as Chalmers points out, there isn’t really a single RBIS at all. Instead there are at least three distinct overlapping and incomplete systems, comprising economic links, international relations and liberal democratic principles in different global configurations. All are based as much on power bargains as on rules. Sometimes they are in competition – as Iran and Huawei both illustrate. China, the dominant power of the new century, embraces some but not all of them, plus some of its own. The US under Donald Trump is opposed to those orders. So the RBIS is not a guide to action for some future “global” Britain. That would require a much more hard-headed assessment of British interests, values and resources.

That, though, is the practical conversation that Britain has refused and failed to have for so long. This is in large part because of the trauma that it involves, for the conversation, were we to have it, would always lead back to Britain in Europe. And that is the one place that we chose – deludedly, tragically and destructively – not to go.

• Martin Kettle is a Guardian columnist