“There must be a threat, there must be a risk, there must be a price. Otherwise we will be in a negotiation that cannot end well.” That is not the rhetoric of a belligerent leader of some rogue state trying to bully its way to regional supremacy, or some tinpot dictator trying to scare rebellious citizens into submission, but the President of France, one of the bastions of modern diplomacy and international cooperation, speaking this week about one of its closest allies. It is yet another damning indictment of how far removed the European Union has become from the principles of international co-operation that should underlie it, that so many of its leaders are far more concerned with punishment and retribution – pour encourager les autres – than having any interest in arriving at a mutually beneficial agreement in the best interests of their own citizens. For all of Hollande’s bluster, the cards remain stacked firmly in the UK’s favour. As European leaders well know, the balance of trade – and jobs resulting from this – means that the EU has far more to lose from adverse post-Brexit trading arrangements, whilst Paris and Frankfurt are simply not credible rivals to London as global financial centres. Indeed, as was articulately argued by Stanislas Yassukovich here yesterday, there is a strong argument that the EU needs the City more than the City needs the EU. But in many ways, the UK’s departure is merely a sideshow to the mounting and deep-rooted problems rapidly gaining pace across the EU. Sitting through European Parliament President Martin Schulz’s rambling speech at the LSE two weeks ago, it was striking how few lessons the EU’s elite seem to have learned from why Brexit happened. Furthermore, Schulz seemed fundamentally unable to grasp the scale of the problems within the EU, casually discussing the EU’s latest plans on broadband expansion at great length, before pinning the blame for the rising tide of discontentment with the EU on anything and everything – except the EU itself. Polling conducted by Pew Research in advance of the referendum revealed the extent of Europeans’ dissatisfaction with the EU, with a majority of Spaniards, Swedes, Italians and the French disapproving of the EU’s handling of economic issues. The figure in Greece was as high as 92%. Views on the EU’s handling of the refugee crisis were even worse, with over two thirds of people in every single EU country surveyed (excluding don’t knows in the Netherlands) disapproving. France is flirting with electing Marine le Pen as President, on a platform of withdrawing from the EU alongside many more unpleasant far-right elements. Meanwhile, the resurgent Nicolas Sarkozy has jumped sharply to the right, aping much of the Front National’s rhetoric alongside calls for genuinely fundamental reform of the EU on a treaty and institutional level. Hollande’s approval ratings remain so low as to make him almost an irrelevance in the election next year. Even before the Brexit vote, 48% of Italians would have voted to leave the EU. Prime Minister Matteo Renzi’s unashamed use of anti-EU rhetoric in an attempt to secure victory in Italy’s upcoming constitutional referendum further shows just how alienated the EU has become – even from its founding member states. Hollande’s justification for wanting to punish the UK was clear: “If not, we would jeopardise the fundamental principles of the EU. Other countries would want to leave the EU to get the supposed advantages without the obligations.” In many ways, these two simple sentences sum up the fundamental disconnect between the EU’s ruling elite and the citizens they are meant to represent. The more the EU’s leaders bang on about “fundamental principles” and the assertion that nations cannot enjoy any advantages from international cooperation without increasingly onerous obligations, the more its citizens are starting to ask simply – why not? The need for some level of compromise on issues where there are clear operational and economic advantages to cross-border harmonisation and co-operation is widely accepted, whether coordinated on a bilateral, regional or global level. But when people are bombarded with the mantra of “no free trade without free movement”, repeated with an almost religious zeal, it leaves them both alienated and bewildered. The vast majority of the world’s nations are able to agree free trade deals with each other without also having free movement of people. It strongly pushes the bounds of credulity and common sense to argue that, within the European Union alone, free movement is somehow fundamentally and inextricably linked to this. A ruling elite that would rather inflict economic damage and job losses on its own citizens than entertain any form of compromise on an outdated and damaging ideology looks more and more unfit for purpose in the eyes of the general public, as Europe-wide polling increasingly shows. But perhaps it is no surprise that people’s livelihoods are considered cheap and expendable by the EU’s leaders in the wake of the economic carnage unleashed by the job-destroying machine that is the euro. Regardless of the outcome of Brexit, the EU will need to compromise significantly to survive. The EU’s existential crisis was set in motion long before this June, when the EU stopped serving the interests of its people and became a playground for the political fantasies of its ideologist elite instead. Punishing Britain might provide a short-lived morale boost in the corridors of Brussels, but it will do nothing to address the root causes of the crisis of confidence in the EU itself across the European continent. Mr Hollande would do well to stop threatening and start listening.