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A crisis has come, so it’s time for Cameron to bang on about Europe

The European crisis demands a fuller response than Cameron has given but he is cautious with good re

David Cameron doesn't like the European Union; he likes talking about it even less. He was an adviser in the last Tory government, which drank itself to death on a noxious, anti-Europe brew. He then saw the party hit the bottle in opposition, while voters looked on unimpressed. So when he became leader, Cameron ostentatiously poured the contents down the sink. There would, he declared, be no more "banging on about Europe".

Now, the sound of banging is back but it has a new tone and a new urgency. The crisis in the eurozone is potentially as dangerous as the one that engulfed the world's banks three years ago. EU institutions have failed to cope. The outcome will be the creation of new institutions or a messy unravelling of the single currency - or a combination both. Greece is bankrupt. Other eurozone members are in deep financial distress. Banks across Europe are exposed, holding piles of government debt, bought on the assumption of low risk, now revealed to be junk. European leaders have twice negotiated multibillion pound bailout packages, only to see them rejected by markets in the way that an upset stomach rejects food: a pause for attempted digestion, then a violent eruption.

The new Eurosceptics

The Prime Minister's response has been remarkably muted, given the gravity of the situation. One reason is coalition with the Liberal Democrats. Nick Clegg's attachment to continental Europe is deep. His political career was founded in Brussels; his mother is Dutch and his wife is Spanish. While senior Conservatives wearily roll their eyes at the thought of a meeting with Herman Van Rompuy, Clegg jabbers away with the Belgian president of the European Council in his native language.

For most Lib Dems, pro-Europeanism is a badge of cosmopolitan anti-nationalism more than it is a policy. It is, in that sense, the direct opposite of shire-Tory Euroscepticism. Coalition negotiations between the two parties on the subject were, however, relatively straightforward. The Lib Dems needed to show their members that they had symbolically spiked the Tories' anti-Brussels guns; the Conservatives were glad of the excuse to surrender a bellicose stance that they knew would be impractical in government.

The Tories dropped their manifesto pledge to "bring back" powers from Brussels. The Lib Dems accepted a "referendum lock" - a legal obligation to poll the nation in the event of more powers being ceded to the EU. It seemed like a neat compromise but it rested on the belief that no big European shake-up would come along to stir up the back benches. It was a reasonable assumption, but wrong.

On 12 September, around 100 Conservative backbenchers packed out the Thatcher Room in Portcullis House, parliament's modern annexe, to inaugurate a new Eurosceptic group. It was chaired by George Eustice, a former press chief for Cameron and one-time UK Independence Party member, alongside two fellow MPs. All three were new to parliament in 2010. Their aim is to rehabilitate Europe as a safe topic for Tory debate, decontaminating the sceptic brand, stripping out what one leading member calls "the obsession with referendums" - and developing a practical strategy for disentangling Britain from some of its EU obligations.

The group doesn't yet have a name but it does have a provisional licence from senior Tories in government ("after some sucking of teeth", according to one co-founder). On 10 September, the Foreign Secretary, William Hague, welcomed the move in an interview in The Times. The group also sees potential allies in Oliver Letwin, the powerful Cabinet Office minister, and Steve Hilton, Cameron's chief adviser. Both men are on a crusade against bureaucracy and are inclined to see the EU as an infidel redoubt.

The Prime Minister's views are vaguer. His distaste for the EU is instinctive but not passionate. One strategy to fire Cameron up, according to a leading Eurosceptic, is to persuade him that Brussels is impeding the "big society": "If one of his pet projects comes under attack, the red mist descends and he can become quite hawkish." For the time being, Cameron needs convincing that it is safe for Tories to focus on Europe without reinforcing spittle-flecked caricature. The 2010 intake of new MPs helps. Most are hostile to the EU - it is hard to get through constituency selection in any other stance - but theirs tends to be a more urbane, libertarian hostility. They resent Europe as a source of regulation and labour protection, not as some imagined conduit for colonisation by Germany. This is not a sign that the old fanaticism is fading. It has triumphed so thoroughly as to be integral and unobtrusive, an ideological watermark in the new generation. Pro-European Tories, meanwhile, are an endangered species. Ken Clarke, the Justice Minister, is their lonely flag-bearer in the cabinet. Most Conservatives see in the eurozone crisis an opportunity that is too good to be wasted.

Diplomatic hooliganism

The UK government has already accepted the logic that, if the single currency is to survive, its members must pursue much deeper political integration, swapping sovereignty for solvency. Even as a non-eurozone member, Britain would have to take a position in negotiations.

On 13 September, George Osborne warned the cabinet that a new EU treaty was on the cards. Tory MPs are bound to see that as an opportunity to begin the great repatriation of powers. They will be frustrated. It would be diplomatic hooliganism for Britain to hold a euro rescue hostage, demanding that old treaties be unpicked. Tory ministers know it, although they will blame the Lib Dems for tying their hands. That will test the discipline of the rebranded, sober Tory sceptics.

The new generation might be more sophisticated in their anti-Europeanism than their 1990s forbears but their patience has not been tested; nor has their tolerance of prime ministers who disappoint. The European crisis demands a fuller response than Cameron has given but he is cautious with good reason. He knows that Euroscepticism is a heady brew for the Tories. The party says it can handle the drink now. Perhaps it can - but the Prime Minister should be nervous at the sound of this particular cork popping.

Rafael Behr is chief political commentator of the New Statesman

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 19 September 2011 issue of the New Statesman, Meet the next Prime Minister