Brexit is momentous and life-changing for Britain. The British people should be given a final say on whatever deal is negotiated. If they are allowed that say, then Brexit can be averted. I and many others will work passionately for that outcome. But today I want to say here in Brussels why Brexit is also bad for Europe, and why European leaders share the responsibility to lead us out of the Brexit cul-de-sac and find a path to preserve European unity intact. For the first time since its inception, a nation, and a major one at that, will have disrupted the onward march of European cohesion, left the European Union and will have done so apparently for reasons of principle at odds with the whole rationale for the Union’s existence. Britain without Europe will lose weight and influence. But Europe without Britain will be smaller and diminished. And both of us will be less than we are and much less than we could be together.

In politics, there is a kind of fatalism which can often overwhelm what is right by making the right course seem hopeless or even delusional. So it is with Brexit. In the UK, we are told ‘the people have spoken’ and to interrogate the question further is treachery. The ‘will of the people’ is deemed clear and indisputable, though what that ‘will’ means in practice given the complexity of Brexit, the multiple interpretations of it, and the differing consequences of each version, is – with every day which passes – not clear at all. But nonetheless we are told we must just do it. And in Europe there is often a sorrowful shaking of heads and a shrugging of the shoulders, when what we need is strong engaged leadership to avoid a rupture which will do lasting damage to us both. I understand European reticence. Until Europe sees real signs that there could be a change of mind in Britain, why should it contemplate the possibility of change in Europe? However, the argument in Britain is far from over. It is in flux. See the speech of Jeremy Corbyn this week. What I call the ‘Dilemma’ of the negotiation – close to Europe to avoid economic damage but therefore accepting its rules or free from Europe’s rules but therefore accepting economic damage – is finally prising open the discourse. It is a binary choice. The cake will either be had or be eaten but it will not be both.

The Dilemma divides the Brexit vote. Many of those who voted Brexit want a clean break from Europe even if there is economic difficulty as a result and even if it soured the politics of Ireland. But many others would not want it if there were an economic cost; and would certainly believe that peace in Ireland should be protected. Outside commentary under-estimates the fact that at some point this year the Government have got to put a vote to Parliament and win it. They will of course try to fudge, but as we are seeing this cake is quite resistant to fudge. After last June’s General Election, winning this vote will be much tougher than is commonly understood. For once, Parliament in this equation can be more decisive than either Government or Opposition. There are three legs to the stool upon which could sit a reconsideration of Brexit. The first is to show the British people that what they were told in June 2016 has turned out much more complex and costly than they thought. This leg is looking increasingly robust as time goes on. The second is to show that there are different and better ways of responding to the genuine underlying grievances beneath the Brexit vote, especially around immigration. This leg is easy to construct but needs willing workers. The third is a openness on the part of Europe to respond to Brexit by treating it as a ‘wake-up’ call to change in Europe and not just an expression of British recalcitrance. This is the leg to focus on today. The stool needs all three legs. For Europe, the damage of Brexit is obvious and not so obvious. In obvious terms, though the economic pain for Britain, especially of a clean break Brexit, is large, the cost to Europe is also significant and painful. One in seven German cars is sold in Britain and goods exports in total are worth 3.5% of its GDP; the figure for Ireland is 14% of GDP and for Belgium over 7%; Britain is a huge market for French produce of many kinds; and a top three export partner for 10 EU members including Italy and Spain. Around 200,000 Dutch jobs are involved in trade with the UK. There are around 60 direct flights between London and Amsterdam every day. According to the Dutch Government agency CPB a hard Brexit could make every Dutch person around 1000 euros poorer. A Europe in which Britain finds it harder to be a financial centre for European business will be deeply damaging for Britain but it will also impede the economy of Europe. Estimates of the long term effect on European growth vary depending on the version of Brexit chosen, but they vary from bad to very bad. In short, no one I have spoken to in the investment community from the USA to China thinks this is a good idea for Britain or for Europe. Because of these effects, some in Britain believe that therefore Europe will bend in its negotiating stance and allow Britain largely unfettered access to Europe’s Single Market without the necessity of abiding by Europe’s rules. This won't happen because quite simply it can't. To do so, would risk unravelling the Single Market and a return to precisely the system that was in place before Europe wisely and in the interests of its economy and with of course the full urging of successive British Governments decided to create the Single Market. But the damage to Europe of a political nature is to my mind more deleterious. For Schuman and other founding fathers, the project of European unity was a project of peace, cooperation in Europe being the alternative to the wars which had ravaged Europe and the world in the first half of the 20th C. They looked back at the long history of European nations and saw centuries of conflict punctuated by all too brief epochs of relative harmony. From the time of Charlemagne, Europe had come together periodically, but mainly through religion, force or transitory necessity. There had been an uneasy balance of power arrangement towards the end of the 19th C but then the rivalries of the great European nations pitched them into a war no one ever thought would prove as devastating as it did. The attempt out of it to produce a new political settlement fell victim to the competing totalitarian ideologies of communism and fascism and the descent into the darkness of WW11. Then, standing on the rubble of destruction, they decided to approach European unity with renewed vigour and vowed to give it institutional and practical meaning. Thus, began what has now become the European Union. The rationale for Europe today is not peace but power.

For almost 300 years, the world has been dominated by the West. At the beginning of that time the great powers were European, with colonies and Empires. Japan and China were of course major nations, but they were not shaping the world. By the end of WW1, the United States had emerged as the most powerful nation, steadily eclipsing the United Kingdom and stayed that way through the 20thC. But today, the world is changing again. China is today the second largest economy, the biggest global trader and as holder of huge amounts of American debt intimately important to global prosperity. If we look back at the top economies in the year 2000, Europe dominates the top ten. Germany’s was 4x the size of India’s and larger than China’s. Mexico, Brazil and Indonesia were distant specks on the horizon far behind. By 2016, the situation changes dramatically. India is now almost as large as the UK and France. By 2030, India’s economy will be larger than those of Germany or Japan. Brazil, Indonesia and Mexico are narrowing the gap. China becomes the largest global economy and 7 or 8 times the size of the UK. Look ahead to 2050 and India is several times the size of the German economy and no European economy is in the top 6. With this economic change, will come political change. The West will no longer dominate. And Europe, to retain the ability to protect its interests and values, will need to form a strong bloc with the power collectively to do what no European nation alone will be able to do individually. Regard the regions of the world today. Everywhere, in reaction to this fundamental shift in geo-politics, countries are banding together: from South East Asia to the continent of Africa. Nations are in a desperate scramble to find their place in a world in which no one wants to be forced to choose between the big powers or unable to withstand their demands. For Europe much more is at stake than trade or commerce.