Refugee crisis roils U.K. referendum on EU

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Once again, the European Union is tearing itself apart but this time David Cameron, the British Prime Minister, is finding his role as aloof bystander in the refugee crisis very uncomfortable. If he gauges his response wrong, it could mean losing next year's referendum on Britain's continuing membership in the EU.

There is surprisingly little chatter about the likely result of the ballot as the enabling legislation trundles through Parliament. But Mr. Cameron knows the quiet is misleading. Even Nigel Farage, the boisterous UKIP Leader, the anti-EU party, and self-appointed tribune on the evils of immigration, has turned down the volume. He broke his silence only briefly on Wednesday in the European Parliament when he described as "mad" the plan promoted by Jean-Claude Juncker, European Commission President, to distribute 160,000 refugees among member states, allocated by quota. The UKIP Leader said the EU should follow Australia's example and stop the boats coming. "[The Islamic State is] using this route to put jihadists on European soil," he claimed.

While Mr. Farage sounded the alarm in Strasbourg about jihadis in the boats, in Westminster Mr. Cameron was defending his government's promise to resettle 20,000 Syrian refugees by 2020. In response to demands from Labour that he commit to admitting this year refugees already within the EU, the Prime Minister insisted on a selection process of children in the camps on the Syrian border. He did not mention the "J" word. "We have to use our head and our heart," he said.

Spotting the public relations disaster on the horizon, the Prime Minister is already preparing the imagery that might pluck the heart strings: Woebegone toddlers in Middle Eastern garb arriving at a British military airfield and escorted into the arms of smiling British adopting families. It is the other images of angry and clamouring crowds of refugees beating down fences on the Hungarian border that he would like to avoid.

It is not just the government that fears the silent choice of Middle England – the "no thank you" to a Europe awash with the flotsam and jetsam of Asia and Africa. British industrial exporters worry about a chaotic withdrawal from the EU and financiers in the City of London wonder whether chunks of lucrative business might shift to Dublin, Luxembourg or Frankfurt. The EU is a huge trade partner, representing about 45 per cent of goods and services exports in 2014 but it is also shrinking in relative terms, losing 10 percentage points since 1999 due to the increasing importance of emerging markets. Meanwhile, Britain is running a widening trade deficit with the EU – the U.K. is a key export market for the German car industry, for example – a point that Euroskeptics make when they argue that EU states would be as keen as Britain to negotiate a free-trade agreement if the U.K. voted to quit the union.

However, Mr. Cameron is desperate to avoid the risk of a divorce settlement with an angry and spiteful club of EU nations just as he was last year when the Scottish were making a similar threat. Arguably there is much more at stake in the EU vote than in the loss of a dependent Celtic province. Even EU migrants in the U.K. are getting cold feet. According to a report in the Guardian newspaper, there is a scramble for British citizenship among the 2.4 million continental Europeans already settled in the U.K. The distant but looming threat of quarrels over work visas makes it worth the trouble of the Life in the U.K. test, an exam for would-be citizens where immigrants are tested about their knowledge of the U.K. in matters such as the name of the patron saint of Wales (David), the year British women got the vote (1918) and the name of the Roman emperor who built a wall to keep out the Picts (Hadrian).

Culture and heritage matter deeply to Europeans, to the extent that Mr. Cameron can draw some private comfort from the grumpy response to German Chancellor Angela Merkel's clarion call for member states to accept quotas for refugee resettlement, the stubborn behaviour of Hungary in building a wall to repel refugees and insisting on proper identification and processing of them, and Slovakian Prime Minister Robert Fico's insistence that his country will only take 200 refugees who must all be Christians, noting that the country has no mosques. His concern about religion echoes Prime Minister Viktor Orban of Hungary who wrote in a newspaper article: "Is it not worrying in itself that European Christianity is now barely able to keep Europe Christian?"

The Czech Republic and Poland are similarly reluctant, as if Central Europe had decided that the refugee hordes were a replay of the Siege of Vienna by Ottoman troops in 1684. However, even Denmark, a nation that prides itself on its liberal credentials, is going out of its way to deter refugees, not only cutting the benefits payable to immigrants by 50 per cent but posting ads in Lebanese newspapers giving warning of the tougher regime that awaits new arrivals.

The mounting resentment is not really directed at the refugees but against Germany, which has infuriated its neighbours. Ms. Merkel's pronouncement that Germany would take 800,000 refugees and her government's demand that fellow member states similarly accept quotas is seen not as generosity but a reckless policy, an imperial gesture that provides further evidence of Germany's determination to impose its vision of Europe on other member states.

Instead of rallying Europeans to the moral high ground, the crisis is sowing division, in Germany too. The CSU party, right-wing allies to Ms. Merkel's CDU, suggested that the government had lost control and attacked her policy as "an unprecedented political mistake" that would have "devastating consequences."

Sitting on the fence, trying to satisfy both the idealistic youth brandishing placards stating "refugees welcome" and the suspicious Middle England householders, Mr. Cameron may be hoping that if and when he is forced to Brussels to negotiate a new relationship with the EU, there will be a small queue of other states hoping to do the same.

Carl Mortished is a Canadian financial journalist based in London.