The most telling part of the latest euro-saving deal is the explicit statement from Angela Merkel and Nicolas Sarkozy that, in the event that their proposals cannot be signed off by all 27 members of the European Union, an agreement between the eurozone 17 alone will do. It is a message that David Cameron must keep in mind.
While relative calm in the financial markets suggests that the plans for closer fiscal union may have some promise, there is still a long way to go. Thorny questions of treaty change, constitutional requirements and the writ of national sovereignty need answers. Efforts to find ways for EU leaders to accept the new rules without triggering time-consuming and unreliable referendums may come to nothing. France and Germany may find their compromise to be not as reliable as it seemed. But there is at least the hope of progress.
It is here that Britain comes in. And the situation is far from encouraging. Fortified by talk of treaty change, the Tory right's calls for the repatriation of powers are rapidly escalating into demands for a referendum. As far as they go, Mr Cameron's attempts to resist the pressure should be commended. He has said repeatedly – and rightly – that Britain's best interests are served by saving the euro. He also lost little time in slapping down Iain Duncan Smith's Eurosceptic rabble-rousing. But the chorus refuses to be quieted: Boris Johnson and the Northern Ireland Secretary are just the latest to weigh in. In the face of historic events in Europe, the Prime Minister hardly needs such distraction. Nor is it clear where he will find the political strength to deal with it.
More concerning still is that even Mr Cameron himself seems to think he can take Britain's usual unconstructive approach to the EU. The overwhelming priority must be to resolve the sovereign debt crisis and ensure the future of the eurozone. But ahead of Friday's crucial summit, the Prime Minister talks of his "practical and focused" requirements as if he has the power to dictate terms. As has been made so clear this week, he does not. Without him, the eurozone 17 will go it alone.
Britain's interests are most certainly not best served that way. Closer fiscal policymaking by the 17 members of the eurozone will directly affect the single market, and the UK cannot afford to be left out of the decision making. Nor is hastening the creation of a "two-speed" Europe in our interests, not least because most other non-euro states want to join the single currency in the future. The risk is of ever-greater isolation, both political and economic.
That is not to say that Mr Cameron's concerns about the regulation of the City of London have no basis. As well as accounting for 10 per cent of the economy, the finance sector is exactly the kind of highly skilled, worldwide service industry which Britain's post-industrial economy needs to keep pace with globalisation. But now is not the time for to-the-death battles over banks' capital requirements or financial transaction taxes. Vital though the City is, saving the euro and securing Britain's place in Europe are more important still.
For too long, Britain's relationship with the EU has been characterised by recalcitrance and special pleading. We demand to be included, then refuse to be bound by the rules; we want all the advantages of the single market, but reject the political project our counterparts share; we decry a two-speed Europe that might erode our influence, yet refuse to countenance joining the euro. It is an attitude that cannot continue. The current crisis is, in part, about the members of the single currency being forced to accept that there is a price to be paid in return for the benefits. The same is true of Britain in Europe. Now, more than ever, we cannot afford to be sidelined.