Isolated UK must start to build EU bridges again

America's 'special relationship' with the UK depends more on Britain's influence within Europe than upon supposed cultural affinities - says the German Marshall Fund think-tank

At five in the morning last Friday, a senior European Union official revealed that the summit outcome could be the first step toward Britain's leaving the EU. After Prime Minister David Cameron's veto of a new treaty embracing all 27 member states, aiming to achieve what German Chancellor Angela Merkel calls a "stability union," the United Kingdom found itself totally isolated. The willingness of the other 26 member states to embrace the proposed stability union - subject to parliamentary consultations in Sweden, the Czech Republic, and Poland - left Britain without any supporters around the Council of Ministers table. Britain has lost good will and influence in the EU and may also do so in the world beyond. From a transatlantic perspective, the United States' "special relationship" with the UK today depends more on Britain's influence within Europe than upon supposed cultural affinities. This, too, is likely to suffer if Britain persists in relegating itself to the sidelines.

Cameron's goal of obtaining a protocol to the proposed new treaty that would have protected the city of London failed to attract any support. His comments to the press, after the summit, suggesting that Britain remains in the single market will be cold comfort to the city. Many observers have pointed out that the survival of the euro depends less on legal obligations to keep down deficits and debt than on the new union taking on real powers for fiscal policy. It is apparent that competence for regulating banks and capital markets will necessarily move toward the Eurozone, if Merkel's stability union is to be effective. Under these circumstances, the UK will progressively find itself excluded from decision-making on key issues affecting the city of London and the single market.

The early hours of the morning are not necessarily the best time for laying the foundations of a future fiscal union. On reflection, the British government and other member states would do well to consider how to build bridges between the 27 of the EU and the 17 of the eurozone. Ill-tempered comments after a sleepless night should not obscure enduring interests that link Britain to other member states, not least Germany and France. The UK and Germany, as major trading economies, share an interest in maintaining the open international economic system.

They will need to work together in the aftermath of the failed Doha development round and in safeguarding the single market. From a wider perspective, France and the UK remain the only member states with the willingness and capacity to project EU power beyond its borders. In the short term, Cameron preferred to listen to Eurosceptical voices in the Conservative Party than to moderate Tories, his Liberal Democratic coalition partners or his colleagues in the EU. The present situation looks bleak for the UK. Yet Britain's vital interest in the single market and the survival of the eurozone will oblige the UK government to start building bridges without delay.

Michael Leigh is a senior adviser with the German Marshall Fund of the United States think-tank, which originally published this paper as part of its Transatlantic Take series