Analysis: Messy affair that could lead to the break-up of the United Kingdom

This treaty could lead to a fiscal union of sorts.

David Cameron could have signed up to revising the EU treaty with comprehensive opt-outs. Instead, he tried to blackmail the other member-states, demanding long-term guarantees against legislation that could affect the City of London as a precondition for such a deal. The others called his bluff.

They will now find it difficult to craft a treaty that is compatible with existing EU law. For example, the EU treaty, which will remain in force, does not foresee automatic penalties. François Hollande, the socialist candidate for the French presidential elections, has declared he will not ratify a treaty that does not create eurobonds or give the European Central Bank more powers to intervene in the currency market. But British hopes for European failure have often been deeply disappointed. European lawyers will find a solution, and the French election campaign will be over on 6 May, 2012.

But this crisis is also a great opportunity for reforms: for cuts in spending, changes in pension systems and transformations of inefficient administrations.

If the eurozone emerges from the crisis stronger, then Britain’s dire situation will become blatantly obvious. Its export share of manufactured products is declining, growth is stagnant and it has the highest per capita state and private debt combined of any larger industrialised country.

If the 26 succeed, the habitual rhetoric of British leadership of Europe will become an even greater farce. It is game and set for 80 Conservative eurosceptics. Their endgame – leaving the EU – would be a messy and expensive affair for Britain. It may also lead to its break-up and, perhaps, Scotland joining the eurozone.

• Wolfram Kaiser is Professor of European Studies at the University of Portsmouth