Threatened by the possibility of a British exit from the European Union, politicians across the continent have rightfully defended the fragile politico-economic bloc from a vote that could open the door for more countries to leave.
But could such an upset potentially yield a brighter future for Europe and, more specifically, the countries that share the single currency that are still being propped up by billions of euros every month?
Unemployment in the Eurozone remains stubbornly high at around 10 per cent, nearly five years after the sovereign debt crisis. Youth unemployment in countries like Greece and Spain still makes for sobering reading. Growth is minimal, productivity and investment is low, and many point to a “zombie” banking sector still adjusting from the economic crash.
Policy-makers have continuously “kicked the can down the road” and problems in Greece are still far from fixed. But if the initial shock from a Brexit doesn’t lead to a domino effect, the Eurozone could be open to what many European officials want: greater political and fiscal integration.
Research carried out by economics professors Enrico Marelli and Marcello Signorelli in February, and published by the London School of Economics, underlined this need for a closer union. They concluded that the “fundamental flaws” of the European monetary union can only be overcome by a “drastic change in macroeconomic policies” which they believe should be a common budget created within the Eurozone.
Could the Eurozone form closer ties with a country like the United Kingdom barking orders from the sidelines?
Leave campaigners in the UK suggest that a Brexit could prove favourable to the rest of the 27 member states that belong to the bloc, not just the Eurozone. Kate Hoey, a Labour Party MP, said in an interview with CNBC on Friday that a leave vote by the UK could be a “catalyst” for change if the EU “is going to survive at all”.
Speaking at the St Petersburg International Economic Forum in Russia, European Commission president Jean-Claude Juncker said that he didn’t think the European Union would be in “danger of death” if Britain leaves.
“We’d continue the process of closer cooperation in Europe, if not of deepening the European Union, and mainly the economic and monetary union,” he said, although adding that Britons were “better advised” not to vote Leave.
Meanwhile, Stewart Robertson, senior economist at Aviva Investors, offers a word of warning. He believes that, while a Brexit could be a catalyst for change, it could still divide the member states.
“This can go one of two ways... it could make the EU stronger,” he told CNBC last week. “If there was a vote for Brexit, either it means the fracture lines within the EU project go deeper because it’s been challenged as an institution, or it may be sort of a rallying call for the remainder of the EU to say ‘right, we had better get our house in order’.”
“It’s almost binary,” he added.