Europe is focused on the Greek crisis as a game of realpolitik plays out that could decide the future of Europe, but there may be another test coming sooner than many feared.
David Cameron is coming under pressure to stage a referendum on Britain's membership of the EU in 2016, or even before, as the polls suggest the Conservatives may win after recent improvments in their standings.
Cameron has pledged a referendum at the end of2017, should he win the May general election, meant to be held after he has completed negotiating reforms, although little is known about what exactly these reforms are to be.
However, such a move would severely affect the UK presidency of the European Council in the second half of 2016. Worse, it would lead to a further two years of the European issue dominating internal party politics, which could not only be damaging for the party, but the country.
This was the view ofthe Director General of the British Chambers of Commerce,John Longworth, who represents employers of five million people. He said the vote should take place much earlier, preventing "years of uncertainty" that would affect business confidence.
A new report from Dutch bankers, ING says that the uncertainty over Europe would cost the UK half a point of growth a year.
In a report fromeconomist James Knightley, the UK is predicted to have growth of3.5% or more in 2018 if Cameron does get enough reforms and a Yes vote in a referendum.
The report does forecast significantly higher growth if there is no referendum,of 2.4%-2.6% a year between 2016-19. The forecast predicts a referendum would cut growth to around 2.1% in the years before the vote.
Britain's departure from the EU would see growth fall to 1.9% in 2017 and 1.4% in 2018 but a referendum verdict to remain in the union would see growth rise 3.5% in 2018 and 3% in 2019.
Exiting Europe would push inflation to 2.8% in 2018 and see sterling fall to below $1.40 says the report.
Shadow Chancellor Ed Balls will be speaking to the British Chamber of Commerce and he is expected to say, "Britain walking out of the EU is the biggest risk to our economy in the next decade. EU exit risks British jobs, trade and investment and the future prosperity of the UK."
He will add, "And every comment by senior Cabinet ministers saying they would be happy or relaxed to see us walk out, and every hint that a referendum could happen as early as next year - before any meaningful reform agenda could be achieved - only adds to the uncertainty and risk for British businesses."
http://www.neurope.eu/article/brexit-2016