Five years ago, in 1994, Britain had two causes for celebration and remembrance. One was the 50th anniversary of the D-Day landings, and we all recall the scale of the commemoration and the sponsorship it received from monarch, ministers and media alike. The second cause for celebration was, or should have been, the opening of the Channel Tunnel, a permanent highway to Continental Europe. Yet in Britain at least, this was a notably low-key event. We discussed the safety of the tunnel, the potential damage to property values in Kent, the effect on our French holidays, the quality of the train service. It was treated, in short, as a late 20th-century amenity, not as an epic event.

How strange, and how sad! The idea of a Channel Tunnel has a long history: Brunel lobbied for it, Queen Victoria backed it, Winston Churchill, between the wars, advocated it as a "notable symbol in the advance of human civilisation". And the tunnel is one of the greatest engineering feats of the 20th century. Yet in 1994 we did not feel able properly to celebrate this, thus doing violence both to our history and to our present achievements. We chose to focus not on our present, not on our future, and not on our long and complicated history, but on D-Day and our comparatively recent past.

I do not minimise the significance of the second world war or Britain's role in it. But, as Hugo Young has suggested, the notion that this was our finest hour has cast something of a paralysing spell, in a way that the author of that phrase would never have wanted. By remembering a certain version of the war too well, we tend to neglect and misperceive our longer history, and so miss out on possibilities for the present and the future.

Britain is a set of islands on the western periphery of Europe. Nonetheless, as a major British politician once observed, "our links to . . . the Continent of Europe have been the dominant factor in our history". Who said this? Margaret Thatcher in Bruges in 1988. She was right.

For almost four centuries, much of what is now Britain was governed from Rome. From 1066 to the 16th century, kings of England were also kings of parts of France. At the end of the 17th century, we were ruled by a Dutch monarch. From 1714 to 1837, German kings ruled over us in tandem with their home state of Hanover. The impact of all this went far beyond politics into the very texture of our society. The Romans and the Norman French contributed to the vocabulary we still use today. Dutch expertise helped to construct the City and the stock exchange. Until recently, the British royal family was overwhelmingly German in blood and often in preferred language as well.

But surely, you might say, the determining factor in Britain's history is that it is an island, cut off from the Continent by the sea. On some occasions, this was indeed so; for certain minds, it is always so. But the sea is a highway as well as a barrier. Before the railways, transport by water was much faster than transport by land. The most important impact of the sea on parts of Britain was not that it cut them off from the rest of Europe, but rather that it allowed regular and substantial contacts with it. Just think of the close maritime, trading and cultural links between the Orkneys and Shetlands on the one hand and Scandinavia on the other, or between East Anglia and the Dutch. Even now, Norwich has no direct air link with London, but it has one with Amsterdam.

Historically, it makes little sense to generalise about "Britain" and "Europe" as though they are or ever were monoliths. Over the centuries, different parts of what is now Britain had different relations with different parts of the rest of Europe - and different relations with each other, too. Wales was only incorporated and given representation at Westminster in the 16th century. Scotland had its own parliament before 1707, which it regains in 1999. The Irish had their own Dublin parliament until 1800. Without detracting from the importance of the Westminster parliament, then, it is simply not the case that it represents a thousand years of exceptional British constitutional development. For parts of Britain, Westminster's centrality is a more recent phenomenon. Viewed this way, devolution is less an innovation than an overdue recognition of differences within these islands that have always existed.

What of war and empire? These indisputably helped to knit the different parts of Britain together. But did they also drive it apart from Continental Europe? As with the sea, it depends how you choose to look at it. Maritime empire was something the British had in common with many other European states: at various times, the Portuguese, the Dutch, the Danes, the Belgians, the French and above all the Spanish, whose American empire lasted longer than Britain's did. Imperialism was not something that distinguished the British from other European powers. What was distinctive about Britain's empire (for a century or so) was its sheer size.

But Britain was never free to choose a global rather than a European role. In the past three centuries, there has only been one major war in which the British have fought without significant Continental European allies; only one major war in which the bulk of the Royal Navy ventured outside European waters; only one major war in which the British were defeated. In all three cases, the war was the one with the American colonies. From that conspicuous defeat, the obvious and correct moral was drawn. Britain, even at its most powerful, could not attempt a global role without first consolidating its position in Europe. It had first and foremost to be a European power, because otherwise it could not be powerful anywhere else.

None of this is intended to discount or deny our distinctiveness. But our particularities are no bigger, no more momentous and no more deep-rooted than those of our European neighbours. Is Britain more different from Spain, another composite state and one-time empire, than Spain is from, say, Denmark? Why should it be supposed that Britain's particularities point it away from the rest of Europe, when Denmark's and Spain's can (with some effort) flourish within it? And why anyway should difference in itself, whether within Britain or within Europe as a whole, necessarily dictate separation? Why should it be supposed that a constantly renegotiated and struggled-over union, whether it be the British Union or the European Union, should require homogeneity among its participants?

There is no sound historical case, as we have seen, for arguing that Britain has evolved invariably in isolation from, or at odds with, the rest of Europe. Yet it would be foolish to deny that Euroscepticism, even Europhobia, has a long pedigree in these islands, on the left as much as on the right. Sometimes, it has taken the form of a suspicion of what William Cobbett called "Continental entanglements", a fear that European involvement can only result in expensive wars. Very often, in the 18th and 19th centuries, it took the form of a belief that our constitution was uniquely free, and that the Continent was a pit of despotism by comparison. And sometimes it has been mere isolationism. As Winston Churchill said of Stanley Baldwin: "He knew little of Europe, and disliked what he knew."

For the most part, these early Eurosceptics were unsuccessful. As Cobbett frequently complained, however much people like him railed against Continental entanglements, the British remained persistently entangled. Geography and self-interest gave them little choice. And even those politicians who boasted most chauvinistically about the peculiar glories of Britain were often cosmopolitan in practice, because once again they had little choice. Lord Palmerston, that quintessential Victorian prime minister, was called "the most English minister"; but he spoke several European languages, was fully at home in the great European capitals and devoted most of his career to European affairs.

By contrast, postwar Euroscepticism has not always been well informed about the rest of Europe and has sometimes appeared shrill and anxious. It has acquired its particular tone from the second world war and from the moment encapsulated by David Low's famous and genuinely moving cartoon of a British soldier standing firmly on these islands raising his fist to a Nazi-dominated Continent, and declaring "Very well, alone!" It is understandable that those who fought in the second world war, or lost family and friends in it, were marked by it for life. But it is often those too young to have been directly affected by the war whose vision has apparently been made most rigid by an image of it.

To some extent, their views are based on fear, suspicion and jealousy of Germany. They hold to the idea that Germany, after its unification in 1870, was characterised by a kind of original sin that makes it inevitably the hammer of the Continent. But that view is now discredited among reputable historians. The belief that Britain and Germany are natural antagonists is equally unhistorical. As Paul Kennedy has shown, there is a longer history of collaboration and mutual understanding. Indeed before 1914, many British politicians and pundits argued that Germany was our natural ally.

Eurosceptic views of Britain's relations with the United States can be equally selective. Only recently, Paul Johnson suggested in Forbes magazine that Britain, or at least England, should actually become a part of the US. We can apparently hope to make up at least five states, and possibly even breed an American president. I find it strange that people who claim to be worried about our independence from Brussels are apparently so eager to surrender it entirely to a country 3,000 miles away.

I find it even stranger that these same people, whose affection for the United States I do not doubt and indeed share (I lived there for 18 years), seem to have such a restricted knowledge of what sort of country it now is.

The US is no longer overwhelmingly made up of, or led by, our English-speaking cousins. I come back to my point that Britain was never the only European power with an overseas empire. The Dutch had settlements in America. So did the French. So, above all, did the Spanish. And the rapid growth of the Hispanic population in the US, as well as its Asian and black populations, is something that many Britons, I think, still do not fully appreciate. As anyone resident in the States will tell you, the Spanish language and culture are increasingly important there, and not just in states with historic links to the Spanish empire, such as Texas and California. Even my own former East Coast base, Connecticut, which was once a British colony, now issues all its public notices in Spanish as well as English. For many reasons, 21st-century American governing elites will be much less European in background, outlook and style than earlier generations. And many will feel closer cultural and emotional ties with Spain than they do with this country.

This does not necessarily mean the contraction of the close alliance with Britain. But it does make it imperative that we approach the alliance in a hard-headed, observant and flexible fashion. We should be wary of putting all our eggs in one transatlantic basket. It is sometimes suggested that Britain's historic links with the US, plus our receptiveness to American popular culture, mark us out from the rest of Europe, that we occupy a special mid-way position between the States and the Continent. These claims rest more on wishful thinking than on solid evidence.

The Atlantic is over 3,000 miles wide; the Channel at its narrowest point is just 21 miles wide. In many respects Britain is not like America at all: in its National Health Service and many of its assumptions about welfare, in its attitude to capital punishment and gun control, in its treatment of the environment, in the sports it plays most and in many other ways, Britain resembles its European partners far more than it does the Americans.

True, Britain also has features in common with the US, particularly in law and politics. And we are drenched in American popular culture. But this does not distinguish us from other parts of Europe as much as some imagine. I have already mentioned Spain's close and dynamic links with the modern US, but I could equally well have cited the important links between France and America. It was, after all, France that enabled the Americans to win their independence from Britain in the first place. It was France that helped to design Washington, and France that gave New York the Statue of Liberty. America and France are sister republics, their histories and politics inevitably intertwined because the revolutions that created them came so close together.

And France, like virtually every other western European state, is as fond of American popular culture as Britain is. Jacques Delors himself loves US jazz, US films, US baseball. He even works with a poster of Citizen Kane behind his desk. None of this, to put it mildly, prevents him from being European.

Other European countries besides Britain have their special relationships with the US - all of them different. These do not prevent them from also seeing themselves as European, any more than being European prevents them from also being assertive nation states. Britain needs to develop a similar confident political ambidexterity. We are not mid-Atlantic. But why shouldn't we look positively and creatively across the Atlantic from a secure position within Europe?

Because, some would argue, Britain, like America, holds fast to certain democratic values and practices that cannot flourish within the European Union. Our constitutional values, according to this view, naturally make us far more comfortable in an American alliance than in "Europe", which has different political traditions. I accept that the Westminster parliament has a distinctive and distinguished history, a point frequently acknowledged by Continental Europeans from Voltaire to Delors. I accept, too, that, as recent events have made all too clear, the European Commission and the European Parliament need reform, greater transparency, and a more secure basis in popular consent. What I dispute is the vulgar notion that informs a great deal of media comment and even parliamentary debate, that our Continental brethren are somehow inherently less democratic than we are ourselves.

Again, a selective memory of the second world war, and of Nazi tyranny, has clouded our judgement. Historically, it is simply not the case that Britain has invariably been more democratic than the Continent. Quite the reverse. It is estimated that, in 1914, only 18 per cent of adults in the UK were enfranchised. Most of the men and all of the women who struggled for our freedom in the first world war had themselves no freedom to vote. This was not only unimpressive in itself, it was unimpressive by European standards. In 1914, Switzerland, Sweden, Serbia, Norway, Italy, Greece, Germany, France, Finland, Bulgaria, Belgium and Austria all had wider franchises than Britain did. Indeed the only European state which was even less democratic than Britain in 1914 was Hungary.

The significance of this goes beyond the historical: it has implications for politics now. Traditionally, Britain has been precocious in evolving stable and effective representative institutions. It has also been strident in celebrating its free constitution. But its record in extending citizen rights is not so impressive. It may be the case, as Delors generously remarked, that the British "have the best journalistic debate, the best parliamentary committees, the best quizzing of prime ministers". In these respects, we have much to contribute towards Europe's better governance. But in safeguarding citizen rights and in broadening democracy at every level, we may have a lot to learn from other European states.

I repeat: Europe is not and never has been a monolith against which Britain can plausibly or usefully be contrasted. Acknowledging this, and all that it implies, is not just essential if we are to engage positively and clear-headedly with the rest of Europe, it is also indispensable if we are to renovate Britain successfully. As Timothy Garton Ash has pointed out, much of the so- called European debate has in fact been a debate about Britain itself. But I am optimistic that the current changes in Britain's governance, far from leading to break-up, will help us.

Whoever wins next Thursday's elections in Wales and Scotland, it seems clear that the new Scottish Parliament, like the new Welsh Assembly, will support a more pro-active role within Europe. In the past, the so-called peripheries of these islands played a major part in forging Britain. So, now, Wales and Scotland may play leading parts in encouraging their English neighbours to come to terms with Britain as part of Europe. Just as our long paralysis over "Europe" derived in part from uncertainty over Britain itself, so these fresh solutions to our own internal diversity may create a new confidence in our dealings with our Continental partners.

I believe that a renovated Britain can contribute a great deal to a new Europe and get a great deal back in return. And to understand the ultimate rationale for an effective and renovated European Union, you only have to look at Yugoslavia now and then look back again to our long past. Precisely 120 years ago, William Gladstone described what he saw as being Britain's abiding interest: to "strive to cultivate and maintain . . . to the very utmost, what is called the concert of Europe; to keep the powers of Europe in union together. And why? Because by keeping all in union together you neutralise and fetter and bind up the selfish aims of each."

The writer is professor of history at the European Institute, London School of Economics.
This article is based on a lecture at a recent conference on "new Britain", organised by the Smith Institute with the "New Statesman" and the LSE