«Many years from now, we may well say Brexit was the missed opportunity to reform the EU», writes Peter Kurer, a lawyer and former chairman of UBS, in his exclusive essay for finews.first.

finews.first is a forum for renowned authors specialized on economic and financial topics. The texts will be published both in German and English. The contributions appear in cooperation with Pictet, the Geneva-based private bank. The publishers of finews.ch are responsible for the selection. Previous contributions: Rudi Bogni, Adriano B. Lucatelli, Peter Kurer, Oliver Berger, Rolf Banz, Dieter Ruloff, Samuel Gerber, Werner Vogt, Claude Baumann, Walter Wittmann, Albert Steck, Alfred Mettler, Peter Hody, Robert Holzach, Thorsten Polleit, Craig Murray and David Zollinger.

At some point between Carlisle and Newcastle, a tourist travelling down from the windy Scottish Highlands towards the large cities of northern England, which are currently undergoing an urban renaissance, will, with or without realizing it, cross Hadrian’s Wall.

Like a small version of the Great Wall of China, Hadrian’s Wall is still clearly visible in lots of places, reminiscent of Christo’s running fence, lightly placed and running sleekly up and down over the landscape of rolling hills until it disappears somewhere on the misty horizon. The great Roman emperor Hadrian had the wall built between 122 and 128 A.D. at the outer northern edge of his empire to control movements across the border and keep the unwanted Scottish and Irish tribes out of Britannia Inferior.

Hadrian was no right-wing populist as we know in modern times, no Donald Trump, but a philosopher on the emperor’s throne, and man a with values and a humane vision.

«Brexit can only be understood against this cultural and historical background»

Hadrian’s Wall is still very important to British people today. They cherish and care for it as one of the jewels in the crown of the National Trust. Even on freezing wet days you will see entire school classes and jolly groups of retirees walking across mile after mile of the remains of the wall.

The British are sensitive to the fact that, for all its cosmopolitanism, a small wall is needed around Britain to defend the distinctiveness of the national character. The classic English expression, my home is my castle, and the image of good old England symbolize that as much as the long wall of the great emperor.

Brexit can only be understood against this cultural and historical background. Facing strong pressure at home, David Cameron travelled to Brussels to negotiate a small institutional wall around the United Kingdom that would protect it against uncontrolled immigration and the ever greater pressure of Brussels bureaucracy on London City.

He was given short shrift. Not much remained of the two main concessions originally demanded by Cameron: Restrictions on the free movement of people and the strengthening of the competences of the national parliaments. All he managed to secure in the negotiations was a provision allowing the British government to limit certain social welfare payments to immigrants under certain conditions.

«Meanwhile, the bookies are showing a totally different picture»

On June 23 the British will vote on the meagre results of the negotiation, and decide whether they want to stay in the European Union or leave. This evaluation of Brexit centers on three questions: What does it mean for the United Kingdom? What does it mean for the EU? And what are the implications for Switzerland? But first we have to examine what the likely result of the ballot will be and what lies behind that.

If you want to get a picture of the possible outcomes of the referendum, there is a wealth of information available. In recent weeks, opinion polls have shown a strong increase in the stay camp; last week the Financial Times gave the share in favor of remaining in the EU at 44 percent, a paper-thin lead over those intending to vote for Brexit (42 percent; April 17). The different financial and commodities markets are volatile and displaying uncertainty and pessimism.

Meanwhile, the bookies are showing a totally different picture: the odds now stand at 2/9 to 1/5 which equates to a likelihood of just 34 percent that the exit vote will succeed. And what do the best-informed observers say? Former Europe minister in the Blair government Denis McShane has published a book on Brexit, and he says the possibility of a separation from the EU is increasingly more likely.

«I’m more with the bookies than with the pollsters»

When I weigh all these different sources of data prediction together, I do not believe that the British will vote to leave the EU. Opinion polls are unreliable, as we know from Swiss experience. In contrast, it has been empirically proven that political bets, in which people place their own money on a possible outcome, allow very precise predictions. Therefore, I’m more with the bookies than with the pollsters. In addition, in votes like this the so-called loss aversion bias applies: We are more predisposed to avoid any type of loss than to acquire gains.

This knowledge of modern consumer behavior, long known in common parlance as «better a bird in the hand than two in the bush», works in favor of the EU supporters here, and that is why the British will stay in the EU.

How did it even come to this point that we have to have these difficult thoughts? The real reason is that the British have never been totally enamored with Europe because of their history and character. The grounds for this reticence are cultural, political and economic. Culturally speaking, the British are closer to their far-flung cousins in New Zealand or Australia than they are to the German or French.

«At the end of the day, Brexit is about a concept»

Politically, going back to the Magna Charta, they have built up a law-based state and a parliamentary democracy over almost a thousand years, that is unmatched worldwide and of which they are rightly proud. Finally, they are traders at heart. In contrast to most of the European elites in France or Germany, they believe in the spontaneous order created by free markets; with this attitude they have established over centuries the world’s most important financial center, the powerful London City, a marvel of free economics.

The British do not want to be convinced that they are more part of ailing Europe than of the world dominating tribe of Anglo-Saxons. They also don’t want their democratic and law-based sovereignty to be subject to the interference of countries that have a much thinner and more fragile law-based and democratic tradition behind them. And finally, they are defending themselves against le grand plan, the concept that a political program or even a rampant bureaucracy are better forces of order than the spontaneity of free markets.

At the end of the day, Brexit is about a concept: Freedom, liberal market economics and conservative respect towards well-proven institutions on the one side, versus political visions, programs and trust in the shaping force of politics on the other.

«Economically, the EU would definitely suffer more than the British»

Would Brexit be good for the British? In the short term and purely from an economic viewpoint, rather not, say the economists and the majority of business leaders. In the long term things look more neutral. The British would lose the advantages of the single market, but could at the same time better protect their City and traditional institutions. They would gain maneuverability and political autonomy, but would have to take into account that Scotland would leave the United Kingdom to throw itself into the arms of the EU.

And would Brexit be good for the EU? No. Economically, the EU would definitely suffer more than the British. An EU without the United Kingdom would then be dominated by France and Germany, nations whose traditional elite believe in the shaping force of politics, bureaucracy, continually extending risk provisions and social security, and that want to regulate the market economy ever more tightly. The departure of the British would damage the liberal openness of Europe and further progressively weaken its competitiveness against Asian and Anglo-Saxon dominated trading partners.

And Switzerland? Many of the country’s vehement EU detractors would be delighted about a Brexit, as I know from some discussions. This is very short-sighted however. Like the British, we are traders at heart. Pragmatic and comfortable outcomes are more important for us than long-term plans that will lead to an economic and social fiasco. If there is a lack of liberal and institutionally-conservative thinking in Europe, the EU will become more and more alien to us, the obstacles to it ever higher.

«We have an interest in a certain stability in our near surroundings»

Something else has to be borne in mind here. Although Switzerland is not a member of the EU, it is much more a part of Europe than the United Kingdom. We are not an Anglo-Saxon tribe on the outer insular fringes of Europe, we are right in the middle of the European continent, closely linguistically and culturally interwoven with it through our own origins as well as through extensive immigration. We have an interest in a certain stability in our near surroundings.

On top of that we have a big advantage over the British: We are not members of the EU. The Swiss have been clever and pragmatic enough to keep their relationship with Europe to a minimum, which creates a platform for us to live more or less peacefully together. In this way we have in many areas even more independent room for maneuver than an EU member, even if this comes at the price of having little say.

Taking all this into account, Brexit does not stand a chance. In the short term it would be harmful to Britain; in the long term the advantages and disadvantages would be broadly balanced. Brexit would be bad for Switzerland, and a catastrophe for the EU. The very fact that the leaving debate has got this far is already a disaster for the EU.

«It could have been an opportunity to create a slimmer organisation»

The EU elite prevailed against Cameron and find it amusing that the British should know by now what is more in their interest and therefore vote to stay. But what they are overlooking is that Brexit could have been an opportunity to reform a union that is blatantly not working anymore.

It could have been an opportunity to create a slimmer organisation, limiting itself to the essential, namely a free-trade zone, common security policy and coordination for foreign policy, and leaving out the unessential or harmful things, such as the coordination of tax regimes, limitless free movement of people and the increasing pressure for a common social policy.

The EU has missed an opportunity with Brexit and shown, that despite large problems, it is not currently capable of reforming. When I think of the EU, the words of the British scientist and novelist C.P. Snow on the downfall of the Venetian Republic invariably come to mind. Snow thought the Venetian elite had become so attached to the ways of behaviour they had developed over centuries that they continued with them long after they were outdated: «They were fond of [their] pattern... they never found the will to break it.»

The former Polish foreign minister Radoslav Sikorski recently said the EU was two steps from the abyss – Brexit and the election of Marine Le Pen as French president. It will hopefully be spared both. In the long term the EU is going to have to find the will to undertake radical reforms if it is not to be ripped apart by something other than Brexit or Le Pen.

«In this sense we can also talk about Euxit»

The term Brexit was coined by combining the word Britain with the word exit, which comes from the Latin exitus. But exitus has another meaning in Latin, known to the medical profession, namely death. In this sense we can also talk about Euxit.

Many years from now, we may well say Brexit was the missed opportunity to reform the EU. In that case Brexit would be the beginning of Euxit, a metaphor for the fact that the EU did not find the strength to redefine itself.

Peter Kurer is a partner with the private equity firm BLR & Partners AG. He studied law and political science at the University of Zurich and the University of Chicago and started his professional career with the international law firm of Baker & McKenzie where he became a partner in 1985. Since 1990, Peter Kurer was a founding partner of the Zurich law firm Homburger where he headed the Corporate Law Practice Group. He specialized in M&A and corporate law and also served on a number of boards of public and private companies.

In 2001, Peter Kurer joined UBS as General Counsel and member of the Group Executive Board. He served as the chairman of the bank during the crisis of 2008-2009 and then retired. He now is also chairman of the telcom Sunrise and Kein & Aber, a Swiss book publisher; he sits on a number of boards, and acts as independent advisor. Peter Kurer writes and speaks frequently on M&A topics, corporate governance issues, and legal and compliance risk management.

His new book «Legal and Compliance Risk: a Strategic Response to a Rising Threat for Global Business» was published by Oxford University Press in February 2015.