It’s pantomime season, so I trust readers will forgive the lighter tone of this week’s article. Picture the scene: it is the 2014 world cup. Malta miraculously gets to the final, and faces Germany. For 90 minutes our heroes bravely repel every attack. In the 90th minute, our forward is felled in their penalty area. The referee points to the spot. Suddenly, a man in a grey suit waving a blue flag with yellow stars races across the field and beseeches the player to miss…for the sake of European solidarity.

True national interests assume easy primacy over fluffy ideals of EU nationalism- Martin Webster

The ref asks: “Are you an MFA representative?” No, what is MFA? “Are you an elected Maltese politician?” No, I’m not an elected anything. “Do you represent Fifa?” No, not Fifa. “Let me get this straight. You appear not to have any legitimacy from anyone, nobody knows who you are, yet you want to change the course of history. Who do you think you are, the President of the European Council?” Yes. Give me your whistle.

Now the question is – should our player miss the penalty to collect his EU brownie points? What is more important - living in fiscal harmony or eternal glory for our fortress island? In fact, the decision is not the player’s to make – he owes his allegiance to his country, owes no allegiance to anybody but his country, and cannot transfer that allegiance to anybody else, temporarily or in perpetuity. But if given the choice I would guess the player would do our country proud and thump the ball into the back of the net.

The simple moral of the story is that there surely comes a point when true and tangible national interests assume easy primacy over fluffy ideals of EU nationalism. For David Cameron that point came in the latest bogus EU summit, where others demonstrated their capitulant credentials by signing a blank sheet of paper with a Bundesbank letterhead.

France led a deluge of infantile insults against the UK. A French official likened Cameron’s actions to going to a wife swapping party without taking his wife. The playground tactics extended to France snitching on the UK with the ratings headmaster (yet simultaneously demanding the UK gives more than its fair share to the latest IMF bailout ruse).

Instead of citing national interests, the playful reply from Number 10 surely should have been that surrendering to Germany may come easily enough to France but Britain suffers from a lack of practice, that Britain had not realised that Carla Bruni was that way inclined but in any case Mrs Cameron did not want to draw the short straw and to send French Treasury a consignment of soon to be needed AA batteries. Students of history will instantly recognise this Gallic charm as the mere continuum of 1,000 years of history – an ingrained national obsession to get one over Les Rosbifs as each opportunity arises. With big sister in tow, it is so much easier. Twenty one miles of the most important water in the world has always separated Britain, and the free world, from the tyrants and political rabies periodically discharged from the continent. If that is isolation, it is a splendid form of it. On this linear measure, Malta has three times the potential.

Joking aside, we have arrived at the central fallacy driving the EU: the dogmatic assumption that it is necessarily always better to be part of a bigger group. That may be true if you are a wildebeest, but not if you are a pro-enterprise, anti-big government animal with the ability to think and act independently of the herd.

There can only be one justification for adopting a set of common rules: if a synergy is created such that there is a net aggregate gain (after costs) and each observer of the rules gets a fair slice of it. That’s called goal congruence.

Let us ignore the EU propaganda and consider the hard evidence: in 1974 Western Europe (defined as the 15 EU countries prior to the 2004 intake) accounted for 36 per cent of world GDP. Despite the never-ending legislation in Brussels this has declined to 26 per cent – during which time the US has remained constant at around 25 per cent. On this basis the EU economic rationale falls at the first hurdle – in fact precisely because of all the legislation, not despite it.

The euro itself has been instrumental in bringing about this failure, since it is the very instrument which has rendered vast swathes of the EU economy uncompetitive. What Europe needs is a thoroughbred EU which serves its members by radically de-centralising, and eliminating red tape to infuse vigour into the economy. What we are likely to get is a carthorse EU which aims to take yet more powers to the ever larger centre, to serve nobody but itself.

We would like to take this opportunity to wish all our readers all the best for 2012.

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Mr Webster is head of equity research at Curmi and Partners Ltd.