If the uncertainty of choppy markets and recent stark warnings such as that of RBS “to sell everything” weren’t enough, London and the UK face a potentially tumultuous year, with a referendum on the nation’s membership of the EU potentially being put to the public as early as this summer.

Under a commitment made by the ruling Conservative party in their election manifesto last year, the referendum must take place by the end of 2017. But with the government in talks with the EU over potential reforms, it could take place in the middle of this year, with for and against campaigns already well under way.

Should the government heed the advice of the Electoral Commission, the ‘Brexit’ question likely to be put to the public is “Should the United Kingdom remain a member of the European Union?” It would be the second referendum held in the country on the issue, after 67 per cent voted in favour of remaining in back in 1975.

Unlike the Scottish referendum a couple of years ago, this time there are so far a patchwork of different organisations — such as the “Britain Stronger in Europe,” campaign chaired by the former head of Marks and Spencers Stuart Rose, and backed by a range of prominent figures such as former PMs Tony Blair, and John Major.

Such campaigns have taken the position that the country is better off remaining in the EU no matter what. There are also others that are pushing for Britain to remain in, so long as certain negotiations concerning Britain’s membership of the EU are successfully concluded, and certain exemptions are obtained. The ‘no’ camp is made up of a range of bodies such as Vote Leave, Leave. EU, and Business for Britain, that argue that no matter what, as a result of red tape, costs, and immigration, Britain should exit the EU.

While some come from the right of centre side of things, it has also drawn support from businesses and some in the city too — such as the investor Jim Mellon, and hedge fund manager Crispin Odey. Quite what the position of Prime Minister David Cameron is, is yet unclear: he’s currently in the midst of detailed negotiations with other EU leaders, but is yet to confirm which way he would campaign should the negotiations not be concluded successfully.

Strike a balance

Strategically it’s a nightmare for the government: it must strike a balance between making demands what could realistically be accepted by other EU leaders, and ensuring that enough reform is brought about to win over those who believe only in a reformed EU.

It’s also the case that some of the changes being demanded by Britain would require changes to fundamental EU treaties, and this certainly could not be implemented by the 2017 deadline.

However, ‘opt outs’ are not unknown — while Britain already holds opt outs relating to the euro currency, Denmark holds opt outs from EU defence and security policy, while Ireland has had a number since 2008 (over security, taxation and so on), following the rejection of the Lisbon Treaty by Ireland that year.

Much will depend on the success of the negotiations, and crunch talks set to take place with EU leaders on February 19. Cameron has a broad range of demands — from restrictions on the benefits that EU nationals are able to receive in the UK, until they’ve lived in the country for at least four years, as well as assurances that as a non-euro zone member it won’t be drawn into further bailouts or a financial union.

He’s also looking for exemptions for heavier regulation of London’s financial institutions, and greater control for Westminster in decisions currently made at a European parliamentary level.

A tricky path

For Europe too it will be a tricky path — they will be eager to keep Britain within the EU: despite ups and downs in the relationship Britain’s membership carries weight, especially with London’s position as a global financial hub, and Britain’s close transatlantic ties.

Britain’s relations with the EU have in any case always been characterised by tension: whether during Margaret Thatcher’s quest for budget rebates in the 1970s and 1980s, or John Major’s attempts to get opt outs on certain commitments of the Maastricht Treaty.

At the same time, too many exemptions would set a dangerous precedent, for countries to be able to bargain their way out of certain policies, making the EU open to becoming a far more of a pick-and-choose project than was ever intended, and more and more opt outs demanded in the face of referendums. A number of other leaders have indicated their eagerness to hold referendums — such as Marie Le Pen, leader of France’s far right National Front party.

There are also big questions over whether, even with the support of the EU’s most powerful members such as Germany, Cameron would be able to gather support for some of his demands. His demands for example on benefit curbs, and restricting the free movement of people would be rejected by Eastern European nations.

Swaying opinions

Cameron has also done little to win support within the EU — alongside confrontations during the various bailouts for European nations, he’s also opted out of the quotas introduced by the European Commission that would see refugees settled across Europe.

Adding to the uncertainty at the moment is the huge variations in public opinion polls: a range of recent polls have put both ‘yes’ and ‘no’ views in the upper 30 or lower 40 per cent range (with many undecideds).

With opinion so on a knife edge, the campaigns are likely to be very important: for now the ‘no’ campaign has had the upper hand, in the public arena at least: with the refugee crisis, and debate over welfare providing it with easy fodder.

The leave-Europe has also been joined by some on the left, who pointing to initiatives such as the controversial Transatlantic Trade and Investment Partnership, argue that it gives weight to multinationals at the cost of people and smaller businesses, as well as hamstringing governments over welfare, and other matters.

It was only recently that Jeremy Corbyn, the leftwing leader of the Labour party clarified that he would indeed campaign for Britain to remain in the EU, despite voting against it in the 1975 referendum.

In any case, the next few months will be watched closely, and certainly by the 700 odd Indian businesses that have their European headquarters in the UK.

While they’ve by and large remained cautious about expressing their opinion, Prime Minister Narendra Modi has been more candid, stressing during his visit to London last year that India viewed Britain as an “entry point” into the EU. Whether Britain will remain that will become apparent by 2017.