By the time the UK finally votes in the referendum on 23 June, one pressing European question will already have been answered, because on 22 June the group stages of Euro 2016 will be complete and the fates thus far of England, Wales and Northern Ireland will be known. Not since England were beaten by West Germany in the quarter-finals of the 1970 World Cup, four days before polling, have the football and electoral timetable coincided so closely. Harold Wilson thought that both the appalling weather and the sour mood that followed that game contributed to a lower than expected turnout in the general election, which in turn furnished a wafer-thin victory for Edward Heath and the Conservatives. Might another disappointing run for England see fans, the majority in favour of Brexit in the polls that have been conducted, stay at home? Or could a blatant injustice perpetrated by a continental referee send them out in droves?

Though football is unlikely to have such a direct impact on the referendum result, it is some measure of the metaphorical and cultural significance of the game that Gordon Brown should come to preface his most significant intervention in the debate with the rhetorical question, “When Europe is the peak of ambition in football and we compete so ferociously to get there, why in other spheres of British life do so many seek to reject it?” The reasons “we” reject Europe are complex, but in football it is now transparently clear that gaining fourth spot in the Premier League and entry to Europe’s Champions League is, in terms of both status and finances, infinitely superior to winning the FA Cup. As the TV ratings and social media numbers for the Uefa Champions League and the Euros attest, no popular European cultural phenomenon comes close to football in engaging the British public. There has been no official pronouncement by the FA or the Premier League, but there is certainly quiet consternation among those members of the football establishment who have thought about the legal and financial implications of Brexit on player visas and recruitment.

While these lines of thought suggest a real and rare engagement with European issues on the terrain of football, they are, as with much of the Brexit debate, achingly parochial and limited in their horizons. In the last decade, the entire European project has been convulsed by intersecting economic, social and political crises. The global financial meltdown of 2008, and its local variant, the Eurozone crisis, have led to a prolonged period of austerity, slow growth and widening inequality. The already fragile state of race relations across Europe has been made considerably more complex and charged by the explosive growth of migration that has – among other things – followed the Syrian civil war, and the proliferation of jihadi cells and actions within some of Europe’s minority communities. The ensuing political crisis has seen a pervasive level of public disenchantment with elites. The centre-right and centre-left parties that have ruled much of Europe for many of the last 60 years have taken the brunt of the electoral damage, opening up space for parties of both the far right and far left, ultranationalist and regional secessionists, many of them deeply sceptical of the European project.

So while Euro 2016 will be the first European football championship to be held during a state of emergency, it is unlikely to be the last. Declared in the aftermath of the Paris attacks of November 2015, which included an attempted suicide bombing of the France-Germany match at Stade de France, the state of emergency has recently been extended to cover the football. Police report that the Belgian jihadis responsible for the March attack in Brussels were planning their own assault on the tournament. Just last week Ukrainian police announced that they had arrested a frenchman with a huge cache of arms on the Ukrainian/Polish border, who was suspected of planning terorrist attacks in France. Consequently, nearly 80,000 state security personnel will be supplemented by 15,000 private security guards and a 10,000-strong military reserve, trained to deal with catastrophic bomb attacks on the fanzones and chemical warfare in the stadiums. It is interesting to note that while the official and commercial zones for outdoor viewing will be going ahead, secured with tens of millions of euros of additional funding, no one else will be allowed to hold their own unofficial outdoor events or screenings. Such is the fate of public space in an era of asymmetrical warfare.

The place of football in European culture wasn’t always so central. Prior to the second world war there was some international football in Europe, especially among neighbours, and dozens of cross-border football migrants, but in a continent riven by war and the struggles between democracy, fascism and communism, there was little appetite for a European-wide football organisation or tournament of any kind. Modern European football only began in 1954 with the foundation of Uefa, with French administrators in the lead displaying the same transnational ambitions and ideas that were shaping the parallel creation of the European Economic Community. In both cases, Britain stood aside as successive Conservative governments dithered over whether to join the EEC, while in 1955 league champions Chelsea were offered the opportunity to participate in the first version of the European Cup – now the Champions League – but declined.

Once outside of Europe – both the EEC and the European Cup – entry became an obsession for British governments and clubs, alike. Celtic and Manchester United were, in defining moments in the clubs’ and their cities’ mythologies, crowned European champions in 1967 and 1968. When the UK finally joined the then EEC in 1973, the occasion was marked by a football match at Wembley, where “the three” (Britain and fellow new members Ireland and Denmark) took on “the six” (the EEC’s core founding nations). A decade of considerable success in Europe for English and Scottish clubs was then terminated by the Heysel disaster at the 1985 European Cup final, after which English clubs were banned from European competition. It was considered not merely shameful but a fatal blow to the nation’s footballing competitiveness. In the last 20 years, as the game has assumed its contemporary hypercommercialised form, European football has – for the biggest and richest clubs, at any rate – acquired a significance akin to access to the single market; continental methods and style have been deemed superior, and the presence of continental coaches and players has become the norm.

The British are not alone in telling these kind stories about themselves. Across the continent, significant parts of the public and the media, as well as politicians and social commentators, consider participation in European competition by both clubs and national teams barometers of the nation’s health; which in turn is just the tip of a vast iceberg of political and cultural meaning attributed to the game. Indeed Tony Judt, in Post War, his epic account of European history since 1945, claimed that “what really united Europe was football”. United is perhaps not quite the right word, for football also continues to be a place for the expression of difference, division and contempt, but that in itself is proof of the game’s role as powerful public theatre.

In the immediate aftermath of Chancellor Merkel’s decision to open Germany’s borders to refugees last autumn, the German football public responded by displaying huge “Refugees welcome” banners in every Bundesliga ground. It was a show of solidarity backed by numerous initiatives, using football as a tool of integration. By contrast, in Poland a month later fans of Silesian Wrocław unveiled a 20x30 metre banner headed “While Europe is flooded with an Islamic plague”, beneath which a crusading knight, the club’s crest on his shield, wielded a broadsword against three boats aiming to land on the European continent: the USS Bin Laden, USS Hussein and USS Isis. A second banner below, in medieval Polish script, read, “Let us stand in defence of Christianity”. It was a show of enmity backed by many Polish football fans in far right, anti-migrant and Islamophobic politics.

That football should occupy such a place not just in national cultures but in an emergent European culture is a notion that the founders of the European project would have found hard to comprehend. Having survived the moral wasteland of two world wars, they had little truck with cultural definitions of Europe that made it the inheritor of classic antiquity or the enlightenment. The notion of Europe as a new Christendom failed to convince even the many pious Christian Democrats who gravitated to the European ideal. Overwhelmingly lawyers, diplomats and politicians, theirs was a Europe bound not by culture and belief, but by the rule of law, the practical compromises of pooled sovereignty, shared markets and institutions, and the powerful material forces of growth, technology and prosperity.

Even when they did acknowledge the need for a European identity and shared mental space to give meaning and legitimacy to the institutions they had created, it was with a very narrow sense of the cultural. As Robert Schuman, French foreign minister and architect of the EEC, argued: “Before being a military alliance or an economic entity, Europe must be a cultural community in the most elevated sense of the term.” It was a level of elevation that stretched to student exchanges and opera tours but was unlikely to include sport, let alone football. It is their and Europe’s loss, for while their narrow tastes served to generate a modicum of esprit de corps among European elites, created networks of European universities and research institutes, and helped support European classical music – not least through the general acceptance of Beethoven’s “Ode to Joy” as Europe’s anthem – they have singularly failed to generate a widespread, popular sense of Europe itself or even a space in which it might be imagined.

The literary and cinematic canons are irreversibly divided by language, and confined to a narrow stratum of readers and viewers. The de facto emergence of English as the language of international communication has made matters worse. Popular music, unencumbered by problems of literary translation suggests more fertile soil and, indeed, as a televised European spectacular, football’s only competitor is the Eurovision song contest. While it has done wonders in creating LGBTQ-heavy transnational networks of kitsch and subversion, and its judging has laid bare the power blocs and shameless horse trading of European politics, it has done little to nurture any wider European musical style, taste or market, accurately reflecting the deeply fragmented, parochial and perennially awful state of most European vernacular pop. All of which means football is a rare cultural space in which a progressive, inclusive and popular idea of Europe can be elaborated.

A decade ago when the European economy was still booming and the newly expanded European Union – although still unloved by the public – appeared a model of regional cooperation and supranationalism, European football appeared to reflect and nurture many of the best features of the continent. It still does. Since the 1950s, it has been able to offer a more expansive and inclusive vision than most other European projects, taking in from the very beginning not just the western European core of the EEC but everyone from Ireland and Iceland in the west to the Soviet Union and Turkey in the east. Football could certainly be cast as an economic sector in which Europe is a winner in relation to globalisation, able to use its technical and financial edge to draw players, investment and audiences from around the world, win five of the seven World Cups held since 1990 and, in the Champions League, play football of unparalleled quality, variety and sophistication. Above all, football showcased the dynamism and interconnectedness of European civil society at a level below the nation state, for the game is a contest between the cities and urban regions of the continent. Furiously competitive and technically brilliant, it benefits from the high level of specialised education and training, openness of labour markets, and the ease and speed of knowledge and technology transfer.

At the level of governance, and certainly when by compared with Fifa and other continental football confederations, European football appears relatively uncorrupt and sensibly regulated, its commercial priorities tempered at least by some measure of social democratic redistribution among the richest and poorest nations. Finally, while there was a long and unpleasant streak of ultranationalism and street violence running through the history of European football, the early 2000s – especially in the 2004 European Championships in Portugal and the 2006 World Cup in Germany – were remarkable for their fabulous displays of benign and carnival nationalism.

Much of this still holds, but on the other side of the global financial meltdown, a much more fractious and occasionally ugly Europe emerges. The contrast could hardly be sharper for the hosts, France, who won the 1998 World Cup with a diverse national team that came to stand for an integrated multi-ethnic nation. In the years since, this image of both the French national team and the nation itself has been repeatedly tested. Instead, the new faces of multi-ethnic European football are the Germans, the Belgians and the Swiss, whose squads all reflect their now complex mosaic of migrants and ethnicities: North African and Congolese Belgians, Nigerian, Turkish and Polish Germans, and a Swiss team so overwhelmingly made up of second-generation migrant kids that after a referendum in 2014 that approved significantly tightened migration laws, opponents posted a picture of the Swiss national team without them – it was reduced to just three players.

While nationalist and nativist political parties and movements are gathering strength in western Europe, they are some way behind their central and eastern European counterparts. As the Polish crusader banner suggests, the football culture of the region is a toxic brew of open racism, xenophobia, antisemitism and Islamophobia. Of course, the involvement of football fans with far right groups is not confined to lands east of the Elbe. Neofascists have been the leading force among Italian ultras for decades and old school football mobs were the leading lights in the English Defence League. Spanish, Swedish and German clubs have harboured neo-Nazi and fascist support. Moreover, there are enclaves of resistance in the east, such as the leftwing ultras of the Czech side Bohemians and the brave souls who run CSKA Moscow against Racism, but they are few and far between. Much more representative are the football politics and cultures of the many national teams from the region that have qualified for Euro 2016.

The distinction between football and politics has almost entirely collapsed in Viktor Orbán’s Hungary where, surrounded by a small coterie of allies who played five-a-side football with him 30 years ago, the prime minister’s authoritarian nationalism has made the revival of Hungarian football – a shadow of its once-great former self – a central object of government policy. Despite a terrible squeeze on public spending, dozens of stadiums across the country are being remodelled or rebuilt, including one in Orbán’s home village that is more than large enough to seat its entire population.

Last November, while desperate migrants poured through Budapest, Orbán watched the national team play Romania in a Euro 2016 qualifying game that saw neo-Nazi nationalist groups from both countries attack refugees in the street and each other in the stadium while chanting a range of antisemitic, anti-Roma and Islamophobic abuse. Both countries were forced by Uefa to play subsequent qualifying games behind closed doors. That is no guarantee of anything, however, as the Croatian Football Federation found out when the national team, punished for racist chanting during a game against Norway, played Italy in an eerily empty stadium. There was no repeat of the chanting, but a swastika, marked out on the pitch using a chemical spray, was clearly discernible on television.

As for England, matters of ethnicity and nation, integration and racism are hardly settled, but its unambiguously multi-ethnic football team has served for almost two decades as an almost unique national institution around which the increasingly tricky question of Englishness could be thought about. For Wales, who last qualified for an international tournament in 1958 when there were still 120,000 people working in the coal-mining industry, the national team offers an alternative imagined community to that evoked by rugby union, its aura still sunk deep in the valleys of industrial south Wales. Northern Ireland’s team, meanwhile, although cross-tradition in composition, is almost entirely supported by Protestant unionists, with Catholic nationalists and Republicans, alike, long opting to support the Republic instead.

Europe beyond the EU will be well represented at Euro 2016. The three giants on the Union’s eastern flank – Russia, Ukraine and Turkey – will all be present, though none are in particularly good footballing shape. Turkey, who scraped into the tournament, are increasingly reliant on Turkish-Germans, trained in the immeasurably superior German academy system, opting for Turkish footballing citizenship. Ukrainian football, like everything else in the country, has been divided and ravaged by war – a quarter of the top division’s clubs have been expelled from the east of the country and are forced to play in temporary accommodation in the west.

Russia presents a different optic, where a galaxy of oligarchs and para-state institutions – from Lukoil to Gazprom – now own the game. Russia’s great power status will be gilded by staging the 2018 World Cup. Associates of the president, Roman Abramovich included, regularly cover the costs of the national team and its expensive foreign managers. Gazprom, the country’s largest conglomerate, spends millions sponsoring local clubs and the Champions League.

While football has become increasingly enmeshed with political realities, it appears to have entirely escaped economic ones. In this regard it is perhaps best thought of as a variant of the financial sector. While almost every other economic indicator has been plummeting, the incomes of players and coaches – who, like bankers, are a tiny and highly internationalised pool of workers – climb relentlessly upward. The Premier League, in particular, has seen a step change in its income as it, above all leagues, has reaped the benefits of a football-hungry, globally networked audience. At every level, already significant economic inequalities are widening and sharpening: between the Premier League and its peers in Spain and Italy; between the biggest clubs in Europe and those in the second rank; between leagues in big countries; between the big countries anda the increasingly marginal medium size and small football nations; between the professional game and the grassroots. If this speaks to some of the macro-changes in the European economy, the prevalence of corruption and match-fixing, tax evasion and the people trafficking of young players reflects its large and enduring grey zones of criminality.

Euro 2016 has two outliers, states institutionally outside the mainstream of Europe and unlikely to enter it any time soon: Albania and Iceland. In football, at any rate, they offer a glimpse of two European political responses to these intersecting problems. Albanian participation in European football has been erratic. In its post-cold war incarnation, communism has been replaced by ethnic nationalism as the leading ideology, and the Albanian football team has served as rallying point for the wider Albanian diaspora - most problematically located in Kosovo. During a Euro 2016 qualifier, a small drone bearing the flag of Greater Albania was flown on to the pitch, sparking a series of brawls among players, fans and match officials and the abandonment of the match. Amazingly, Uefa rewarded this act of provocative ultranationalism by designating the game a 3-0 win to Albania and punishing the Serbs for their own lapses of control. Given the readiness of the French security apparatus, a similar stunt at the Euros is likely to be met with a volley of surface-to-air missiles.

The rise of Icelandic football is a reminder of what a different but distinctly European society can produce on and off the pitch. With a population of just 325,000, the country has qualified for an international tournament for the first time, beating Turkey, which has 250 times its population, on the way, and moved in the world football rankings from 131st to the 34th. All this in the wake of a catastrophic financial meltdown that saw the country bankrupt and excluded from international capital markets. The sources of Icelandic success are multiple. The real energies to invent a process of change and development came from below, among football players, coaches and fans perennially disappointed by the state of the game. In the era of easy credit, Iceland spent heavily and wisely on dozens of heated indoor football centres, making year-round training, playing and competition possible for the first time. Participation rates are astronomical, by both genders and across all ages, yielding not only a bigger talent pool, but the powerful charismatic collective energies of a grassroots football mania. Above all, Iceland believes in education, and has almost as many Uefa-accredited coaches as there are in the whole of England.

Two of the things that the EU was once meant to stand for were the strength of its social solidarities and the generosity of the welfare states that helped nurture its capacity to invent and sustain public projects for the public good. Iceland qualifying for Euro 2016 is hardly the manifesto we need for imagining an egalitarian, democratic, social Europe, but, given the limits of what is currently on offer, it is good to be reminded that such projects are possible at all.

• David Goldblatt’s The Game of our Lives: The English Premier League and the Making of Modern Britain is out in paperback, published by Penguin.