Finishing touches on a refresh of David Cameron's wax figure at Madame Tussaud's, with Boris Johnson next to him, 2015. Yui Mok / Press Association. All rights reserved.Huge amounts of energy are being invested in the REMAIN and LEAVE campaigns for the forthcoming EU referendum in the UK.  The referendum vote on whether to remain in the European Union or not, is being presented by both sides as the most important decision that the UK voters will cast in their lifetimes. Both sides greatly exaggerate the benefits and risks of leaving or staying in the European Union.

In reality, whether the result is REMAIN or LEAVE, very little will change in terms of the general shape of the UK’s relationship with Europe and its institutions. Nothing will be as good outside the EU as the LEAVE camp suggests, and the world will not collapse as the REMAIN camp implies. The most likely scenario is that things will stay largely the same whatever the outcome of the voting. 

The UK’s EU referendum has come about, not because of some overwhelming popular desire from the people, but as a result, essentially, of David Cameron’s attempts to prevent further destructive divisions fuelled partly by the rise of the UKIP, within the Conservative Party. 

The world has changed a great deal in the last two decades. As a result of the rising economic success of emerging powers and the slowing down of the core economies of the west, the   previous world order under US/ western Europe‘s hegemony has visibly weakened. There is an ongoing fundamental power shift to the global East (China, India, Brazil, Russia, South Africa, Indonesia and other emerging powers), and the reasons for this are to be found in the decline of the Anglo-American core since the late 1960s. 

It is virtually impossible for the US to regain the power that it enjoyed in the 1940s and 1950s by falling back on a path of growth and prosperity under whatever policy initiative, post-Keynesian or otherwise, inasmuch as the erosion of its productive, industrial, material base seems historically irreversible. The United States may well turn out to be a great power among others but by all forecasts, it will not regain its superpower positioning of the 1950s.  The erosion of the industrial base of the Anglo-American economy has been accompanied by increasing productivity in the global East, especially China and India, which increasingly operate through economies of scale that could dwarf those currently enjoyed within the US market. 

It seems that the age of dominance by any single hegemonic power, first experienced by European colonial powers and then the US, is over. The impact of new powers is so great that the centre of gravity of the global inter-state system has already shifted away. Despite the slowing down experienced by China, India and other emerging economies, the emerging world of the global East is still growing substantially faster than the developed world, not racing ahead fast, but a more balanced growth. All predictions suggest that by 2030, China’s GDP is expected to represent 20% of the world’s total, overtaking that of both the US and the EU. 

What is the relevance of these shifts for the EU’s position in the global power architecture?   From 1995 to 2005, the EU looked like a rising global power. It doubled in size, from 12 states to more than two dozen. The euro was launched for a united continent. Western Europe was considered one of the world’s most prosperous and stable regions. In the last decade,  however, things have changed dramatically, and today the outlook for Europe is much more uncertain. Its destiny appears to be that of a strictly regional power, rather than a global giant. Even in international summits, like the IMF and G20, the voice of European powers are overshadowed by the US, China, Brazil and India.

On many major international fronts, the EU seems to be playing a secondary role. There are huge challenges ahead for Europe. It is predicted that the most likely scenario for the future of the European area over the next 10 to 15 years will be a very slow or no growth. Eight years after the greatest financial crisis and economic downturn since the Great Depression, none of the underlying contradictions of the European economies has been resolved.   Structural imbalances and deep-rooted tensions have further deepened the financial and economic crisis and the outlook looks pretty bleak. Hundreds of billions of dollars have been made available to save the banks and financial houses. This large-scale bailout, rather than getting to the root of the problem (declining productivity and investment in technology), has increased the volatility of the system. Weak manufacturing data from European economies have sparked renewed fears of a further slowdown. Recently, the World Bank warned that Europe runs the risk of sparking a Lehman-style global crisis that will have dire consequences for all western economies. 

Eight years on from the start of the economic downturn, it is becoming increasingly clear that a new period of intensified crisis is gripping the global economy. Across the western world there is widespread unemployment, foreclosures, bankruptcies, depressed housing markets, and no recovery in sight; in many European economies unemployment is at its highest since the 1930s.

These dire conditions are being accompanied by the deliberate whipping up of the most virulent forms of nationalism and xenophobia. Anti-Muslim and anti-immigrant propaganda provide convenient scapegoats for the social and economic crises that have been intensified by austerity measures and official toleration for extreme right and fascist movements in individual countries in Europe. 

The measures directed against migrant workers and refugees (border fences, concentration camps, police violence and persecution) have evaporated Europe’s previous social democratic and liberal pretensions. The basic factors at the root of the continent’s colonial past are ascending to the surface again: racism, imperialism, and a hierarchical order, which have interplayed with each other and produced numerous kaleidoscopic patterns since the imperial powers of Europe first started to dominate, colonise and exploit the rest of the world more than 250 years ago. 

Neither side of the UK’s referendum debate, whether they utilise a left phraseology or a right-wing patriotic language, provides any constructive answer to these problems. Instead, whether explicitly or implicitly, national chauvinism and xenophobia are promoted. Both sides share the goal of shutting the doors of Fortress Europe to desperate refugees – the victims of the western powers’ imperial designs in the Middle East and North Africa. Both sides also seem to be committed to the same neoliberal policy of austerity, which is damaging any potential growth prospects and increasing the possibility for a longer and deeper crisis.  These are the key issues for the UK, and other European countries, desperately waiting for immediate solutions. For the first time in recent history, the number of working families living in poverty exceeds those without any work, according to the Office for Budget Responsibility. What little recovery there has been in the UK has not been driven by investment or production, but fuelled by household spending. In order to maintain the basic level of spending necessary, many people are now using their savings. According to Debt Charity, the proportion of people with payday loan debts has increased from 3.7 percent in 2009 to almost 20 % in 2014.    

These urgent issues for Europe are not being addressed by the debate about whether to remain in the EU or not. What this country needs urgently is a long term view of what a sustainable economy should look like. 

It is a matter of political will whether and how the UK’s resources can be tapped for investment in infrastructure, housing, green economy, transport and education. There is nothing more urgent than this. The EU referendum is just a distraction from the real issues facing us at this time. It is a gigantic distraction that has been deliberately inserted by competing sections of the political and economic elite.