Is Britain on the way out of the European Union? And what kind of Europe would it be leaving? These were the main questions addressed by Charles Grant, Director of the Centre for European Reform, in a lunch discussion organized by the German Marshall Fund’s Brussels office on January 11, 2012. The event was attended by high level policy makers from the EU institutions, journalists and representatives from think tanks and the academic world. Sir Michael Leigh, GMF Senior Advisor, offered comments, and the event was moderated by Dr Ian Lesser, Executive Director of the GMF Brussels office.

After the December 9 EU summit, the United Kingdom has found itself increasingly isolated from the rest of Europe. Charles Grant pointed out that British public opinion has turned sharply against the EU in the last year and many members of the ruling eurosceptic Conservative party have been demanding a referendum on the UK’s EU membership. Unless something reverses these developments, the possibility of Britain leaving the EU in the coming decade has suddenly become real.

According to Grant, the Europe it would be leaving behind has become less cohesive and therefore less decisive. Many different groupings have emerged within the EU, all moving at different speeds. Inside the euro zone, there is a split between the northern ‘surplus’ countries, and countries like Portugal and Greece. Outside the euro zone, there are the countries preparing to join the euro, including Poland and Latvia, and those wishing to stay out, such as Denmark and Sweden. Amid these groupings, the UK is in a category of its own.

Several policymakers expressed their concern with the way Britain is heading. If the UK does decide to step out, it would leave a poorer EU. This would not only be in light of Britain’s positive contributions to developing EU policy in the past – for example the European common defence strategy – but would also leave smaller Member States to Franco-German rule.

So how can this momentum be turned around?

The outcome of the discussion was that bridges have to be built on both sides of the Channel to end Britain’s isolation. The UK should restore its relations with its natural friends and allies in Europe, which it has been neglecting. At the same time, the countries within the EU have to reach out to Britain.  A positive EU agenda has to be advocated within the UK as a counterweight to the euro scepticism now dominating the debate. British businesses, policymakers and think tanks should all start thinking of ways to influence the policy debate, as an engaged and participatory Britain in the heart of Europe is still in the interest of both the UK and the EU.

To listen to a podcast with Charles Grant and Michael Leigh, click here.