The European Union has never been very popular in Britain. It joined late, and its voters will be asked on June 23 whether they want to leave early. The referendum’s outcome will not be legally binding on the government; but it is inconceivable that Britain will stay if the public’s verdict is to quit.

Over the years, the focus of the British debate about Europe has shifted. In the 1960s and 1970s, the question was whether Britain could afford not to join what was then the European Economic Community. The fear was that the United Kingdom would be shut out of the world’s fastest-growing market, and that its partnership with the United States would be at risk as well: The Western alliance would consist of two pillars, and Europe, not a shrunken Britain, would be one of them.

Today, it is the enfeeblement, not power, of Europe, that drives the UK debate. The British perceive themselves as doing rather well, whereas Europe is doing badly. Indeed, ever since the 2008 crash, the EU has been identified with failure. Outside Britain and Germany, there has been almost no economic growth. It cannot defend its frontiers against terrorists (“Europe is not safe,” proclaims Donald Trump). Its institutions lack legitimacy. Made up of 28 quasi-sovereign members, it cannot act, but only issue intentions to act. No wonder there is a move afoot to reclaim national sovereignty, where some decision-making power still resides.

The EU’s fate has become hopelessly entangled with that of its most vulnerable feature: the 19-member eurozone, the single-currency heartland of economic stagnation. To officials in Brussels, the eurozone is the EU. Only Britain and Denmark have been allowed to opt out. The other members, including Sweden, are expected to join when they meet the criteria. The eurozone was to be the engine of political union. But the engine has stalled.

To be sure, the 2008 crisis started with the banking collapse in the US. But most of the rest of the world has recovered, whereas most of Europe has not. To assess why, a recent symposium on the subject at Nuffield College, Oxford, focused on the lack of a sovereign authority able to protect the European economy as a whole from contagious crises starting elsewhere. The missing bits of sovereignty include a fiscal transfer system to respond to asymmetric shocks; a risk-free asset (eurobonds) in which to park redundant money; a single system for supervising banks and capital markets; a central bank able to act as lender of last resort; and the ability to organize an EU-wide stabilization/recovery program.

The eurozone has weakened the nation-states comprising it, without creating a supranational state to replace the powers its members have lost. Legitimacy thus still resides at a level of political authority that has lost those attributes of sovereignty (such as the ability to alter exchange rates) from which legitimacy derives.

Meanwhile, promises of action continue to flow. The so-called Five Presidents’ Report calls for “completing Europe’s economic and monetary union” as a prelude to “political union.” But is that the right sequence? Historically, political union precedes economic and monetary union. As Otmar Issing, a former ECB chief economist, never tires of pointing out, without a sovereign, the process of transferring competences – including monetary policy – to ever higher levels will create a huge legitimacy deficit.

The EU has tried to achieve political union incrementally, because it was impossible to start with it. Indeed, barely hidden in the “European project” was the expectation that successive crises would push political integration forward. This was certainly Jean Monnet’s hope. The alternative – that the crises would have the opposite effect, leading to the breakup of the economic and monetary union – was never seriously confronted.

Few people in the UK would welcome a rapid move toward a political union, assuming this means filling in the gaps in sovereignty that have crippled the eurozone. Indeed, in the deal that Prime Minister David Cameron negotiated with European heads of government as a condition of remaining in the EU, Britain is specifically exempted from commitment to “ever closer political union.” Yet, without a political union, it is hard to see how the eurozone can be made to work.

The eurozone is therefore likely to break up into more compatible parts, after further failed efforts to muddle through. One can imagine a northern single-currency area, with enough sovereignty (provided by Germany or, more plausibly, by Germany and France acting together) to make it work, linked by free trade to a southern area that is not subject to the northern bloc’s monetary and fiscal rules. Specifically, members of the southern bloc would have fixed, but adjustable, exchange rates with one another and with the northern union.

The southern bloc, however, would lack a member with the weight and prestige to counterbalance Germany. That member could only be Britain. And this is the main argument against pulling out of the EU: By staying in, Britain would be able to ensure that, if and when the eurozone’s breakup comes, the process is not too messy, and will at any rate preserve something of the spirit of the EU’s founders. Britain has much to fear from an acrimonious divorce, as it will inevitably be swept into its turbulent wake.

It has always been part of Britain’s role to act as a bridge between different worlds. It can play this role in the two Europes of the future, but only by not cutting itself off from the one Europe that currently exists.

© Project Syndicate