Hand over a €60 billion ransom or we won’t even start to discuss a trade deal: that, if Jean-Claude Juncker is to be believed, will be the European Union’s opening gambit ahead of Brexit.

Bring it on, I say: the best way to expose a very weak adversary who is pretending to be very strong is to call their bluff. Yet it may never even get to that. At this rate, what is left of the EU could soon be begging us for a trade deal, not the other way around.

The reality is that the EU is edging ever-closer to the abyss: it is at its weakest, most vulnerable since its creation, and it is now touch and go whether it survives 2017 or whether it is swept away in a catastrophic populist revolt.

Trouble is not only brewing in France, where Marine Le Pen keeps gaining ground, but also in the Netherlands, in Greece, in Italy and in eastern Europe.

Even if the dissidents fail, for now, the EU will soon be crippled by Britain’s departure, robbing it of its financial centre and billions of pounds a year in net contributions.

The EU’s modus operandi has always been to buy support with German and British money, especially in poorer regions and in France’s agricultural heartlands: when the cash runs out, or is replaced by some euro-tax, tensions will flare up again.

We keep worrying about how Brexit will affect Britain. But the real question is how Brexit will debilitate Brussels, shift the balance of power and ideology on the continent, with smaller, more pro-market nations losing their British champion, and trigger a new dash to yet more unpopular centralising treaties, fuelling more rage and anger. Yet the Eurocrats in Brussels and some Remainers in Britain keep on talking as if nothing has changed, as if the UK were leaving some powerful, eternal, economically successful superpower. The status quo is gone, forever, and what is left could be smashed further in just three months’ time.

David Fuller's view

‘Those whom the gods wish to destroy, they first make mad’, including driving them into the EU.  It will be a rude awakening for political Remainers, from the House of Lords to Scottish Nationalists.

It is hard to see how the breakup of the EU could not be disruptive, not least because it is the last outcome that many people have expected.  They bought into the concept of an EU gravy train, without questioning the flawed economics of this reckless experiment.  This will be the focus of many books and university economics courses for decades to come.

Allister Heath feels that we should leave quickly.  I have long favoured a rapid exit from the EU but the UK Government appears to have felt that this was too controversial and risky, not least in terms of public opinion, plus UK businesses and also foreign businesses with divisions in Britain. This view may be correct.

At this point, time may work in the UK’s favour, although there are certainly plenty of risks, mainly in the form of EU bad debts.  This will all be very contentious, although I maintain that over the longer term, Europe including the UK will be far better off as a trade association of independent, self-governed countries with their own currencies.  For convenience, they can also maintain a separate commercial currency, such as a version of the euro or bitcoin, if they wish.  This trade association would be for mutual convenience within Europe but the individual countries should also be free to trade with other countries, where there are mutual interests and trade synergies.  The last thing Europe should want or need is more trade barriers. 

Here is a PDF of Allister Heath's column.