The historic reordering of British politics has been overshadowed by the world?s worst financial crisis in generations. The rest of Europe waits to see what David Cameron will do.

Rarely - or perhaps never - in the history of post-war Europe has a British Prime Minister launched his continental policy at a time of such economic turmoil.

The formation of the UK's first coalition government since the Second World War, with its unlikely honeymoon between two semi-juvenile male leads, excites the Westminster microcosm and enthralls the nation (or so we are told).

Here, on the other side of the Channel, fear of unmanageable financial dynamics and out-of-control eurozone politics stalks the chancelleries and sets the public agenda.

The genteel reordering of British politics is overshadowed by the staggering financial and political upheaval triggered by the latest chapter in the continuing drama of the world's biggest financial crisis in generations.

In an extraordinary display of economic, political and psychological obtuseness, Germany's government single-handedly reignited a new round of market angst last week by banning naked short-selling without warning any of its EU partners, instantly destroying much of the beneficial fall-out from the decision not quite two weeks ago to create a €750bn safety net for financially struggling nations.

Consternation is growing even among Germany's friends across the continent as the government in Berlin retains its deeply parochial focus on the politics of the Bundestag and the constitutional court, seemingly forgetful that its every move is evaluated, over-analysed and magnified by the financial markets. Berlin looks positively autistic in its refusal or inability to see and acknowledge the fundamental dynamics of today's globalised and terrifyingly precarious financial edifice.

The increasing uncertainty over the eurozone's ability to steer its ship through the hurricane is pushing Europeans towards a harsh choice. They can either take a leap of faith into fully fledged political integration or face the prospect of the euro's possible demise - and with it the collapse of the post-war project of European integration.

In Europe's present dire straits, David Cameron must choose between three alternatives. He can sit on the sidelines with a friendly grin, hoping others will sort out the mess. He can strive for narrow political advantage, manoeuvring to reinforce his relationship with his counterpart in Paris or Berlin as tensions and suspicions mount within the Franco-German axis.

Or he can surprise and thrill the European public, and perhaps even some of his home audience, by reaching for the mantle of statesmanship and working as a mediator of European unity rather than promoting disharmony. What a delightfully new role that would be for a Prime Minister of Her Majesty's Government.

This piece was first published in The Independent on 22 May. 


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The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.