First, the steps forward. Decisions taken by Nato in Berlin on Monday mean there is a realistic possibility that, some time in the future, Europe may be able to take on defence tasks that at the moment require direct US participation.
Second, the steps back. Yesterday, France and Germany agreed to reassess some of their co-operative defence projects, and maybe to open them up to other nations, perhaps including Britain. This is a decision driven by money above all, thanks to the rising cost of some projects, and the pressure on budgets caused by the shift to European Monetary Union.
But it also reflects France's move back towards the mainstream of European defence. There is less need for an exclusive Franco-German alliance in this area, now that all European states - including Britain - accept the need for a European defence and security identity, however defined, and now France is heading back into Nato's military structures.
Oddly enough, Britain finds itself well placed in this complex series of manoeuvres. Even Michael Portillo sounds sensible when discussing European defence (at least when he is not at the Conservative Party conference). He said on Monday in Paris that Britain might join the Franco-German arms procurement agency.
The British view has always been that European defence can be built only from the bottom up, not by constructing grand concepts. Both the new Nato thinking and greater co-operation on procurement are signs that on this subject, at least, Europe is moving in our direction.