‘The United States, China, and maybe the European Union, if Great Britain stays within it’ will lead tomorrow’s world; in fact, continued EU membership is the only way for the United Kingdom to secure ‘a future worthy of her past.’ This sentiment could have come straight out of an old French discourse on the pursuit of grandeur through European integration. In fact, it came from former British Labour Prime Minister Gordon Brown.

The result of the UK’s upcoming referendum on EU membership—which will take place on 23 June—is currently impossible to predict. With opinion polls indicating a deeply divided electorate, it is vital that reasonable members of the Labour Party, not just the financiers of the City of London, campaign actively for continued EU membership.

The experience with Scotland’s 2014 referendum on independence carries important lessons for the campaign. In the Scottish referendum, the key to securing a victory—and a comfortable one, at that—for the pro-UK camp was a combination of negative warnings and positive arguments. In other words, while fear, based on credible risks, has a role to play, so does hope, with a campaign that addresses both the evolution of the international order and the sense of patriotic pride of a majority of British citizens. Fortunately, Brown, a Scot who played a leading role in securing the vote against independence, recognizes this.

It is ironic to note that such a discourse would probably be difficult to sustain in France nowadays, even though it is the only other EU member to think in ‘great power’ terms. But France, unlike the UK, is in the midst of a serious crisis of confidence—one that bedevils much of the rest of the EU as well. In fact, it is this European crisis of confidence that has turned the current refugee crisis into an existential one: If the EU fails to regain control of its external borders, it will erect internal ones, jeopardizing the entire European project.

Amid such widespread skepticism, Brown’s move to link EU membership with national pride is practically revolutionary. But the logic underpinning the approach is straightforward: The more one is gripped by self-doubt, the more important it is to return to the basics. When faced with acute, seemingly overwhelming threats like Islamic terrorism, Russian adventurism, and demagogic populism, the best refuge can be fundamental principles and values—complemented by a little common sense.

What Europeans must remember is that they still live in democracies that not only respect their citizens’ fundamental rights, including the right to express themselves, but that also have economies that are at least as competitive as those of most of Europe’s rivals. Though their leaders certainly have work to do—for example, building more efficient and credible institutions—the EU remains a source of inspiration for others, from the refugees fleeing war and misery to the Chinese, who have constructed European-style cities.

To sustain Europe’s international influence, while supporting continued peace and prosperity across the region, the EU needs to address its current crisis of confidence. To this end, Europe needs a moral renaissance rooted not just in European countries’ common cultural heritage, but also in their shared democratic values. Such a movement must be propelled by the sense that, far from being mutually exclusive, European integration and national pride are mutually reinforcing—a perspective that presupposes strong, confident national states, as proud of their individual heritages as of their shared one.

Here, the ‘mother of democracies’ can lead the way. In fact, in appealing to British patriotism to boost support for European integration, Brown is betting on the UK’s self-confidence, its democratic essence, and its economic performance. Only on this basis can the country engage willingly, constructively, and fearlessly with the rest of Europe.

That is why a campaign against ‘Brexit’ that focused just on the economic and financial consequences—which would be serious, to be sure—would be inadequate: It would not reinforce British confidence. Worse, just as a failure to consider interests is a refusal to confront the ‘real world,’ failure to consider values would be undemocratic, the kind of thing Russian President Vladimir Putin would do.

Europe’s crisis comes at a difficult moment globally. The US may be in the midst of a highly uncertain political transition. Russia is engaged in historical revisionism. Africa is facing a bevy of development challenges, alongside a demographic explosion. And the Middle East has become a chaotic and bloody battleground. In this context, the most patriotic thing British voters can do is redouble their commitment to European integration. One hopes that Brown and his colleagues are able to convince them in time.

Seemingly random events can cause surprising discontinuities.

Strategists commonly monitor bellicose national leaders, military arm-wrestling and armed provocation as the harbingers of strategic discontinuity. But, as Philip Bobbitt demonstrates so cogently in his Shield of Achilles, apparently disconnected events can have profound strategic consequences.

When Martin Luther posted his 95 theses on the doors of the Schlosskirche in Wittenberg in 1517, no one could have imagined that, a century later, the Thirty Years War would decimate Europe’s population and eventually lead to the Peace of Westphalia—the progenitor of modern international relations. And did anyone advising George III on his ‘Proclamation of Rebellion’ in 1775 suggest that war against the pesky colonists—many of them members of religious splinter groups fleeing oppression—would create the preconditions for the world’s first superpower?

So, should anyone be concerned about the VW crisis, and how it might pan out? Is it simply a ‘black swan’ moment, rationalised after the event as inevitable, or could it precipitate a series of significant and unpredictable transformative consequences?

Corporate (and government) deceit is not new. At the corporate level, the banking sector has been enmeshed in scandal for over a decade.  The Global Financial Crisis continues to reverberate through the international financial system, exacerbating the downward economic trend resulting from China’s economic slowdown.

A cartel of major international banks, exploiting the fraudulent deals and insider-trading practices of their trading room operators, manipulated the Libor (London Inter-Bank Offered Rate) interest rates for the best part of a decade before the Libor crisis became public in 2014.

At the government level, a number of European governments and central banks connived at the creative accounting that enabled Greece to evade the conditions of the Maastricht Treaty when it joined the Eurozone two years after the currency had been introduced.

In some respects, the adoption of the euro was the triumph of hope over experience. Currency union without political union now seems rather more fraught than it appeared in 1999. And Europe, with its three-speed economy (the PIGS—Portugal, Italy, Greece and Spain—and the central Europeans in deep economic trouble, France struggling, and Germany currently propping up the entire system), is faced with high rates or unemployment, low productivity, growing political instability and, to make things even more interesting, the biggest refugee crisis in 70 years—a crisis that isn’t bringing out the best in everyone.

Onto this scene crashes Volkswagen. While ‘everybody’s doing it’ might explain the extensive gaming of fuel consumption and emissions regulations, the sheer scale of Volkswagen’s deceit has forced governments to act. The company has admitted that 11 million of its diesel passenger vehicles have been fitted with the software that falsifies emissions data under test conditions. The UK boasts 1.2 million these cars, while the US, with some 500,000, and has banned the sale of new VW diesel vehicles until 2016. So has Switzerland.

As of the end of September 2015, VW’s share value has plunged by 40%. The CEO has been replaced, and is under investigation. While the company has a provision of €6.5 billion ($US 7.3 billion) for software rectification, it faces US punitive and exemplary penalties that could total $US 18 billion. Moreover, class actions instituted by private and fleet buyers on the grounds of misleading advertising and the consequent loss in resale value could exacerbate VW’s woes.

The company may be facing bankruptcy. A central government bailout is always possible, of course, though that may well depend on the extent of emissions data rigging across the entire German car industry.

Besides the trashing of the VW brand and the consequent loss of value, the economic consequences may include the demise of the diesel engine in passenger vehicles and a more rapid transition to electric vehicles. And because of the widely held suspicions of systemic dishonesty among the other European diesel vehicle manufacturers, the VW crisis may well bring down other sections of the German and French car manufacturing industries.

But what might the strategic consequences be?

First, the VW crisis will inevitably be a severe hit to Europe’s balance of trade, particularly at a time when German vehicle manufacturing is the star export performer.

But if VW is forced to file for bankruptcy, the impact on the balance of trade will be even more severe. If the Bundesbank is no longer able to prop up the economies of the PIGS, the southern European economies may well have no choice but to exit the euro zone, thereby imperiling the survival of the euro as a single currency and as the second major reserve currency. And this, in turn, threatens the very existence of the EU, already under threat from the right in the UK and France.

There should be no misapprehension: a return to the pre-EU system of nation states in Europe would not be a return to the status quo ante. A reunified Germany has replaced France as the predominant European state: the political map would look more like that of 1890 than 1990.

And what might happen to VW and its subsidiaries were it to go under? One might expect that its various financial operations (mostly managing the financing of VW leasing and sales) and brands (Audi, Skoda and SEAT) would be sold off, along with the associated factories, plant and IP. The unemployment and other social consequences in Saxony would certainly exacerbate the political instability that already infects the eastern and northern states of the federation.

But perhaps more significantly, the sale of VW would offer China an unparalleled opportunity to acquire a hi-tech car industry that would not only permit Chinese dominance of global automotive manufacturing but also restructure global automobile exports.

And lest people think that VW’s tribulations could not possibly precipitate a gloomy strategic future for Europe, they would do well to remember Churchill’s withering scorn for the complacency that precludes consideration of the violence and destruction that might ensue political collapse. ‘It would be a pity to be wrong. Such a mistake could only be made once – once for all.’