Why Europe needs to resolve euro trilemma amid chances of Brexit

IN April 1978, I attended the European summit in Copenhagen as British foreign secretary. There, I first heard Helmut Schmidt and Valéry Giscard d'Estaing, the German and French leaders, spell out their ideas for European monetary union. Little did I realise they were outlining a project that was doomed to destroy Europe's then slowly evolving unity.

In retrospect, this was the first outward sign of the "vice of pretension" that is doing so much to erode today's European Union. Britain concluded that the exchange rate mechanism (ERM) launched by Mr Schmidt and Mr Giscard was at best premature for the UK, and declared it would not join. But it did join the overall framework, the European Monetary System, and signed up to its share of European currency units.

Now we know the ERM was flawed. The UK eventually joined in 1990 but was forced to leave in 1992, albeit with no significant consequences. The British government since 2010 has made clear that it is more than content to support an "efficiently designed" euro area, as its continued failure harms the British economy. But virtually every necessary reform puts the euro system on the path to greater political integration, a direction of travel neither I nor many British people want to embark on.