A Brexit lesson: is a single currency not worth the gamble? In less than fifteen years, Europe's baby boomers will try to collect pensions from the children they didn't have.

• Author: Sinn, Hans-Werner

The speed at which Britain has been written off in some of continental Europe's capitals is quite remarkable. Yet even after the exit, Britain remains one of Europe's major economic nations and the European Union must come to an arrangement with it. Taking steps to punish the British population, which is what some now dream of doing, will not pay off. Besides, Britain now has enough of its own domestic problems to deal with. Politicians who complain of Britain's "cherry picking" in a bid to prevent it from trading freely with the European Union only reveal their own ignorance. Free trade is not a zero-sum game; and those who adopt such a reductionist approach will only end up hurting themselves.

It is time for the European Union to take a critical look at itself. The trick of identifying the political exploitation that occurs in Brussels with Europe in order to distribute advantages and power in the slipstream of people's enthusiasm for integration no longer has the desired effect. Citizens don't want soothing sound-bites anymore, they want policies that they can understand and that offer them tangible advantages. Attempts to proceed along the path followed to date, perhaps at an even brisker pace, run the risk of destroying Europe.

Twenty-five years ago, Germany wanted to ensure that Europe remained close to its citizens by anchoring the subsidiarity principle in the Maastricht Treaty. However, there have been no visible efforts by the Brussels-based establishment to date to show that this principle has been taken seriously. On the contrary, Brussels grabbed as much power as national governments would tolerate and was presumptuous enough to implement excessive regulatory measures--extending to prohibiting light bulbs and high-performance vacuum cleaners--that increasingly met with disbelief.

The really important issues, however, like integrating the military powers of member states and creating a common European army, were ignored. What kind of a European Union is this if it is not even able to control its own borders?

BRUSSELS AS A RISK FACTOR

The topic that massively swayed the Brits' decision to exit was migration. Britain previously experienced mass immigration from overseas territories back in the 1950s and 1960s. Although successive Prime Ministers Edward Heath and Margaret Thatcher put a stop to the inflow of even more immigrants back then, the striking consequences of that immigration wave included slums, dilapidated urban areas, an overburdened welfare state, and wage competition among poorly qualified workers. The fact that the European Union enabled poverty-driven migration from other EU states discredited it in the eyes of many Brits.

On top of this, refugees from non-EU states started arriving because the European Union was not in a position to secure its borders. And that was the last straw.

The economic chaos in some EU countries also helped to discredit the European Union. Due to an inflationary credit bubble, Southern Europe became too expensive and lost its competitiveness. Manufacturing output is still 20 percent below its pre-crisis level in some of the European Union's key economies. Youth unemployment led to political turmoil. Some states and a large number of banks were pushed to the brink of insolvency. These problems could only be masked with generous bail-out packages and unrestricted promises of liability. The EU doctors gave drugs because they lacked the competence or the courage for surgery.

Although the British do not share the burden of rescuing southern Europe, they are frightened of being pulled down with it. If the Germans want to play that game, they are free to do so, but the British definitely do not want to get involved in a liability union.

That is probably also what distorted all of the forecasts. Undecided individuals tend to avoid risk and opt for the status quo. Most observers thought that the status quo was EU membership, but the Brits astonishingly saw "splendid isolation" as the secure way of life, while the European Union was perceived as an incalculable risk.

ECONOMIC ADVANTAGES AND DRAWBACKS

Britain is facing economic and political highs and lows that will make even the most resolute Brexiteer falter. The separation of Northern Ireland and Scotland is now in the cards. There will be capital flight as the City loses its role as Europe's financial hub. Companies like Vodafone, easy Jet, Samsung, the Bank of America, Ford, and even Europe's largest bank, HSBC, are considering moving their European headquarters away from London. The joint British-German stock exchange will hardly be able to set up its main headquarters in London now. London real-estate prices...