As we enter the second half of the century’s second decade, the European Union (EU) is splitting along three faultlines. One divides the prosperous north from the indebted south. A second separates a eurosceptic fringe from a europhile centre. A third is between a socially liberal West and an increasingly autocratic East. This is a scene of disintegration and fracture.

It is hard to make specific forecasts for 2016. There are, of course, many known risks. A British referendum on membership of the EU. The steady stream of refugees. The widening economic imbalances. A meltdown in Greece. Italy’s quasi-insolvent banking system, and looming tensions between Germany and the peripheral Eurozone countries over fiscal policy. A surge of extremist terrorism. Political uncertainty in Spain and Portugal. The crisis in Ukraine, still far from resolved. The Volkswagen emissions scandal, which has faded from consciousness but threatens to undercut one of the continent’s remaining pillars of industrial strength.

With so many crises going on at the same time, I find it more useful to look at the big picture — at the systemic risk that comes not from any one crisis in particular, but from confronting so many of them at the same time.

Once you take a step back, the multiplicity of crises begins to look less accidental. If you create a monetary union without shared economic institutions, fiscal policies and legal systems, you are bound to hit a wall eventually. Likewise, a passport-free travel zone without joint coastguard and border controls cannot last.

There is a pattern here. The EU has an innate tendency towards foul compromises and fair-weather constructions. Nothing fundamental changed last year, except that this problem became apparent to a lot more people.

Rupture, when it comes, may still shock us. But it also offers opportunities. I believe that the biggest error the EU could possibly commit would be to continue in its old ways. Big changes are more likely to be forced by the electorates directly — through a referendum, such as the one to be held in the United Kingdom — than by politicians and diplomats. The EU process has a tendency to avoid sudden dislocations. Things will only come apart when the pressure from national capitals becomes too strong.

There is a danger that this will trigger uncontrolled disintegration. But there is a good chance that Europe’s political leaders will be wise enough to move on in a constructive spirit. A UK vote to leave the EU may, in the long run, trigger a wider transformation of the EU into an inner group of countries that seek deeper integration, and an outer group, in which Britain and other countries would be perfectly comfortable.

A rupture of the Eurozone, which I still expect to happen at some point, also offers the opportunity of a wider re-alignment. Once you think about the euro as a fixed exchange-rate system with a shared currency, as opposed to an irreversible monetary union, the mental fog lifts.

Exchange-rate row

Such a system could only work among a small number of countries with largely convergent economies. Austria and Germany have maintained a quasi-fixed exchange rate since the 1970s. Why should they not continue to do so for another 50 years? France and Germany have maintained an essentially fixed exchange rate since the 1980s. Why should they end up on different sides of an exchange rate now?

The case for further economic and political integration between Germany and France remains fundamentally strong — much stronger than the case for political and economic integration of an EU where some countries are part of a single currency, and others have no intention of ever joining it.

There was never a convincing logic to the argument that a single market requires a single currency. But the converse logic holds. Countries with a single currency require much deeper market integration than countries that maintain their own money. If we accept the EU as a union containing multiple currencies, as we now should, we will have to accept that it is not a single market, but a collection of discrete ones.

On top of economic fragmentation, Europe is dividing politically between East and West. Both Hungary and Poland have elected eurosceptic governments of the right. Both have curtailed the independence of the judiciary and the freedom of the press. I have believed for some time that enlargement of the union was not the big historic opportunity that was claimed, but a historic mistake. Enlargement has added to Europe’s divisions and made the EU dysfunctional.

I therefore see fragmentation and rupture not as threats to be avoided but as opportunities to be grasped. My expectation for 2016 is that we will see more rupture. My hope is that it will be wisely managed.

— Financial Times