David Cameron knows the value of working with the EU, but his hands are tied by Tory Europhobes and Ukip
"Exciting stalemate" might seem the ultimate political oxymoron, but Brussels is a strange city. Last week's failed EU budget summit there marked a possible fork in the path, and Britain's best chance for years to help shape the continent's future. But is David Cameron capable of seizing this remarkable opportunity?
Probably not. The Eurosceptic forces massed at Westminster, and the growing popularity of Ukip, are likely to cause the prime minister to freeze just at the moment a bigger political operator – a visionary – would move ahead, and change the terms of trade.
Let's start with that summit. It was only one moment in the tangled history of EU politics, but the fact that Angela Merkel had not engaged in the usual pre-summit stitch-up with Paris – she apparently loathes François Hollande – made it a significant one. The whole European project, going right back to the iron and steel community, is based on Franco-German intertwining.
There have been times before when this has seemed in bad repair. What makes this time different is that Germany's destiny, and France's, are less clear. Germany under Merkel has reached that painful but inevitable time when its economic strength means it has to take political leadership, and the unpopularity that involves. France, which once assumed it would be the political leader, allowing Germany only economic dominance, suddenly looks instead like the factional leader of the struggling southern countries – Spain, Italy, Portugal and Greece.
So when Merkel sides with Britain and the Scandinavians in demanding a tougher approach to the central budget, and is less careful about France's tender feelings over agricultural subsidies, the possibility of a fundamental rift appears.
British politicians of left and right argue regularly that Britain needs to be more like Germany, with stronger regional and industrial banking, better technical training, and an economy less dependent on the City. That's the burden of Michael Heseltine's recent report on growth, and of Vince Cable's growth ideas. You can hear it, too, in Labour's analysis, from statements made by the leadership through to those of "Blue Labour" thinkers such as Lord Glasman.
If the EU consisted of Germany, Poland, the Netherlands and Scandinavia, Britain would have no real problem with fully involved membership – including, probably, a single currency.
Now of course, we are a million miles away from any fundamental breakup of the EU, and it would be catastrophic for us if it happened – but the love-in between Cameron and Merkel shows both sides that they could do pretty well by forming a closer relationship. The euro group is going to have to go for deeper integration, and that's going to be led by Germany. Though the UK is outside the euro, British support and encouragement would be very helpful for Berlin. Meanwhile, German support for Britain remaining a key member of the EU would allow us to stay at the table even while taking no part in the single currency.
There's a deal to be done. It could lead, as Timothy Garton Ash suggested in the Guardian last week, to a double-centred Europe, with Britain at the heart of the foreign and security hard core, and Germany (with France) at the heart of the economic hard core. Labour talks about a multi-centred Europe, which doesn't sound a million miles away.
Although Cameron and William Hague are portrayed (and have portrayed themselves) as tough-nut Eurosceptics, I strongly suspect such a grand bargain would privately delight them too. It leaves Britain's prized diplomatic position enhanced and, if the City was protected from some aspects of a banking union, life could go on as before. We would be in, but not quite in; and that's how the London elite likes it.
It may be an over-interpretation, but I wonder whether Hague's infuriating vagueness over the timing of any referendum, or real choice – and he was at it again over the weekend, mumbling and humming away – reflects the hope that a multi-core Europe could yet emerge and stop the agonising choice between in or out. Certainly, the gap now visible between France and Germany, and the warmer relationship between Merkel and Cameron suggests that what used to seem impossible is now a genuine possibility.
Well, it's a nice idea. The trouble is that we haven't got the political leadership capable of seizing the chance, of jumping forward. To do that, Cameron would have to make it clear he would help the fiscal union Germany needs to come about. He would become a friendly enabler, prepared to take political hits at home, to make the EU work as well as possible.
There could be no talk of vetoes, or of seizing the chance of a new treaty to renegotiate everything about British membership, with referendums and a fresh start. For one thing, that's a short route to political paralysis, which Merkel can't afford. She and her team will turn just as quickly against Cameron if it's back to the old British naysayers and special pleading.
The most likely outcome, though, is that Cameron won't change his tone radically, as he would need to do. Why? First, because of the rising hubbub on his back benches from people who want to leave the EU completely, or at least a radical revision of the relationship. These are views you can now hear from Tory ministers, too. I have no sympathy for Cameron about the dilemma he faces, since he has gone along with this all his political life, from his first days as a bag carrier.
The second, closely connected, reason is the Ukip threat. Rotherham council's incomprehensible decision to remove three young children from their foster parents because the couple were Ukip members, condemned by all the main parties, can only help Ukip in the coming byelection. But frankly, they hardly need help. They have evolved under Nigel Farage into a fully functioning rightwing alternative to the Tories and are scaring Conservative high command quite badly.
Everything points to a close election in two years' time, and Cameron will be told by his new adviser, Lynton Crosby, that he cannot afford to alienate the Europhobe heartlands any more.
Cameron has had a "good" summit. He'll be applauded in the House of Commons when he reports back. But he's on a hiding to nothing. This was a brief glimpse of a better European future available to us; the Tories will swiftly draw the curtain again.
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