As the European Union faces the worst and most dangerous crisis since its creation, not only is Britain refusing to help, it is actually using this historic moment of weakness to extract “concessions” from its fellow members. This is the back story to the “Brexit” referendum, in which the government is threatening to leave the EU unless its demands for a “better deal for Britain” are met. Indeed, why merely kick a man while he’s down if you can go through his wallet too?

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The negotiations in Brussels over this deal are entering their final stages: last week cabinet members were told they’d be free to campaign for an exit whatever the outcome of the talks. So this makes it high time for Europeans to take a cold and honest look at the British. Or rather, the English. Scotland is largely pro-EU while Wales and Northern Ireland, with their smaller populations and the less imminent threat of secession, have far less influence. How to deal with the English, then, over Brexit?

Step one is to ask if this referendum is actually a once in a lifetime opportunity to cut the English loose. Why not let them simmer in their splendid irrelevance for a decade or more, and then allow them back in – provided they ask really, really nicely. The English will still be in Nato, and what are they going to do? The United States values Britain as its proxy seat at the European table. With that seat empty, why would Washington keep its poodle?

Meanwhile half of British trade is with the EU, but only 11% of EU trade is with Britain. As the Oxford-educated Polish politician Radoslaw “Radek” Sikorski – one European who knows how to talk to the English elite – characterised the balance of power post-Brexit: “No prizes for guessing who would have the upper hand in the negotiations.” So if the English want to be a little Russia or mini-Turkey – former empires suffering from debilitating withdrawal symptoms – why not let them?

But then there is the unprecedented refugee crisis, the euro mess, the ever-growing terrorist threat, and the Russian invasion of Ukraine. Together they make this a really bad time for further instability. Yes, we would strangle or crush the English in the post-Brexit negotiations, the way any group of nations comprising 450 million people would to an opponent eight times smaller who has just tried to blackmail them.

The best way for the EU to prevent Brexit is to start preparing for it, loudly

But here’s step two. We must recognise that the English elite has chosen its moment well. Europe is vulnerable, and we just cannot afford another distraction from our real problems. Which means we must help the pro-EU camp in England.

One way to do this would be to meet at least some of the English demands. This is what David Cameron is clearly hoping for, but it would be a historic mistake. If the UK is rewarded for its cynical act of extortion there will be referendums all over the place, paralysing Europe for a decade.

This is why the best way forward for Europe is to threaten to hit the English as hard as we can. We must stop treating membership of the EU as a favour granted by England, and instead make the English feel their vulnerability and dependence.

First and foremost, this means a change of tone. For many mainland Europeans the EU offers the promise of freedom from the threat of nationalism. But the English have a different experience. They are taught to believe that nationalism is what saved them from Adolf Hitler and, as a consequence, they see no need for a post-national political entity. This is why for England, the EU is an economic rather than a cultural and political project. Read pro-Europe newspapers such as the Financial Times or listen to English pro-Europe politicians, and every argument is framed around the country’s national interest.

In other words, the English attitude towards the EU is transactional rather than transformational – therefore appealing to the European ideal or England’s better self is pointless. Instead we need to spell out all the ways in which we will make the English suffer if they leave. Using explicit threats may seem to be a very un-European thing to do, but think again: for nearly all England’s mainstream politicians and pundits, “un-European” is a compliment.

So let us start talking now, out loud in Brussels as well as in Europe’s opinion pages and in national parliaments, about the offer we are going to make to the Scots, should they prefer Brussels to London in the event of Brexit. Let’s also discuss in which ways we are going to repatriate financial powers from London to the European mainland. It is strange enough that Europe’s financial centre lies outside the eurozone, but to have it outside the EU? That would be like placing Wall Street in Cuba.

Facebook Twitter Pinterest ‘How electrifying it would have been if Cameron had demanded an end to the insanely wasteful practice of moving the European parliament back and forth between Strasbourg and Brussels.’ Photograph: Emmanuel Dunand/AFP/Getty Images

Clearly multinational corporations from China, Brazil or the US cannot have their European HQs outside the EU. So let’s have an EU summit about which European capitals these headquarters should ideally move to. Make sure the English can hear these discussions, and in the meantime keep an eye on how the value of commercial real estate in London plummets.

Or consider the UK-based Japanese car industry – would Greece, with its excellent port and shipping facilities, not be its ideal new home? Oh yes, and sooner or later, the 1.3 billion Indians will object again to not having a permanent seat on the UN security council when 55 million English do. Let’s work out what favours we want from India in exchange for our support.

The best way for the EU to prevent Brexit is to start preparing for it, loudly. But this is not enough. European politicians and pundits must not be shy of cutting England down to size. This is the chief problem for those in England trying to make the EU case: they must acknowledge first how irrelevant and powerless their country has become. Except that is still a huge taboo.

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Seen from China or India, the difference between the UK and Belgium is a rounding error: 0.87% of world population versus 0.15%. But this is not at all how Britain sees itself – consider the popular derogatory expression “a country the size of Belgium”.

But alas, what a missed opportunity this referendum is. A child can see that the EU needs fundamental reform and just imagine for a moment that England had argued not for a better deal for Britain, but for all of us Europeans.

How electrifying it would have been if Cameron had demanded an end to the insanely wasteful practice of moving the European parliament back and forth between Strasbourg and Brussels. If he had insisted on a comprehensive overhaul of the disastrous common agricultural policy, on the long overdue reduction in salaries and tax-free perks for Eurocrats, and on actual prosecution of corrupt officials. Instead he has set his sights on largely symbolic measures aimed at humiliating and excluding European migrants, safeguarding domestic interests versus those of the eurozone and, no surprises here, guarantees for London’s financial sector.

Ultimately, as far as the EU is concerned, the English are only in it for themselves. All the more reason, then, for Europeans to stop imploring them to stay in, and begin using their strength in the negotiations.

•Swimming with Sharks: My Journey into the Alarming World of the Bankers, by Joris Luyendijk is published by Guardian Faber, priced £12.99