Britain’s relationship with the EU is relevant to us in Malta not just because we are members of the same club but also because of our long-standing historical ties with the former empire.

...Britain’s relationship with Europe has always been one of uneasy coexistence- Simon Busuttil

So when the British Prime Minister, David Cameron, took the unprecedented step of vetoing (blocking) an important decision that was agreed by everyone else at the EU summit last week, it was bound to draw our attention.

All the other EU countries – including Malta – wanted to change the EU Treaty to insert tougher fiscal rules that wound oblige members to put their financial house in order.

In practice, this would mean that, from now on, all EU governments should balance their budgets and limit themselves to spending no more than what they generate in revenue. At worst, a budget deficit should be of no more than 0.5 per cent, which should be enough to cover for a rainy day.

These are common sense financial rules and it is difficult to understand why anyone would be against them.

Certainly, for those of us who believe in sound public finances as an essential pillar of sustainable growth, they should be welcomed. The fact that they are also necessary to save the euro’s credibility is almost beside the point.

Since this agreement required treaty changes, it needed everyone’s consent. But Britain pulled out its veto claiming that it was not given sufficient assurances on its “national interests”.

These national interests turned out to be a request to exempt the UK’s financial sector from EU rules designed to control abusive behaviour in the financial markets. Again, after the financial turmoil that we have been through, it is difficult to understand why anyone would object to this. Except for the City of London, it seems.

So the remaining 26 EU countries were faced with a stark choice: either to give up the treaty changes and risk the future of the euro or to go their own way without Britain. Sensibly, they chose the latter option.

But this option is fraught with difficulties.

Since no treaty changes can take place without the consent of all countries, the remaining 26 countries could only do this by drawing up a new treaty among themselves outside the EU framework, hence, not requiring the UK’s consent.

This option throws up a host of complications, such as whether the EU institutions can be used to monitor the implementation of the new treaty. This would depend on whether the UK would allow the EU institutions to be to apply a treaty that it opposes. And if the EU institutions are not able to police the implementation of the new fiscal discipline rules, what guarantee is there that they will be respected?

Little wonder, therefore, that Mr Cameron was not the most popular man in the room last Friday.

For with 26 countries determined to go ahead, Britain found itself as the lonely man of Europe, faced with the inevit-able question of whether it should be in or out of the EU altogether.

Indeed, this episode opens the cupboard on the UK’s long-standing love-hate relationship with the EU. And a lot of skeletons are bound to come out of that one.

Depicted marvellously in Hugo Young’s book This Blessed Plot: Britain And Europe From Churchill To Blair, Britain’s relationship with Europe has always been one of uneasy coexistence. It is a fascinating story of constant torture between the hope of “leading from within” and the glory of splendid isolation on the outside, a tantalising prospect for a country that, let’s face it, has never quite come to terms with the loss of its status as a world power.

Having joined the then European Community in 1973 at the behest of the Conservative government led by Edward Heath, as irony would have it, it had to be a Conservative-led government that is now driving the country to the brink of rupture.

A posse of militant Eurosceptic members of the party have capitalised on a public opinion that has long been fed by a voraciously Europhobic press and seem to have cornered their Prime Minister into facing the ultimate existential question of Britain’s place in Europe. This is why they welcomed his “bulldog spirit” in wielding the veto. But, then, snarling bulldogs do not make many friends.

And Britain’s veto may have been a bite too far for its European partners.

Hopefully, it will not get to an exit.

Mr Cameron claims that he is firmly committed to Britain’s membership of the Union because it is in Britain’s interest.

As I write, his deputy, Nick Clegg, leader of the pro-European Liberal Democrat junior coalition partner, expressed his “bitter disappointment” at Mr Cameron’s decision to “isolate” Britain.

Mr Clegg argues that, far from being “bulldog”, wielding a veto in the name of British national interests might well end up undermining the very same interests that it seeks to protect.

Whatever the British decide is entirely up to them. If they choose to go, it would be a sad day for Europe. For them splendid isolation may well be an option. But if they choose to stay, they should not block everyone else from moving ahead.

simon.busuttil@europarl.europa.eu

Dr Busuttil is a Nationalist member of the European Parliament.