London wants to restore some power to national governments in the European Union. The British government believes the European project has moved too far from its original purpose of creating a European common market and is now threatening the sovereignty of its member states. In late 2011, the United Kingdom voted against a treaty to concede more control of national budgets to Brussels. In mid-2012, Cameron's government launched a study to determine what powers should be taken back from Brussels, and in January, Cameron announced that Britain would renegotiate its relationship with the European Union and hold a referendum on its EU membership after the 2015 general elections.
At the same time, Germany has since the beginning of the European crisis been calling for deeper European integration. Berlin believes that Brussels should have more control of member states' fiscal policies in order to prevent excessive deficits and unmanageable levels of public debt.
Despite their differing views, neither London nor Berlin wants to see the United Kingdom withdraw from the European Union. Though it is Euroskeptical, the United Kingdom benefits from its access to the common market because roughly half of its exports go to continental Europe.
In addition, London needs to have some influence on the European Union's decision-making in order to execute its geopolitical strategy. Traditionally concerned about the emergence of a single continental power in Europe, the United Kingdom is forced by strategic necessity to ensure that there is some degree of continental disunity. The United Kingdom has also sought to balance its involvement in European affairs with a privileged relationship with the United States. For the past four decades, London has used its EU membership to stall the process of economic and political integration in Europe.
The problem for London is that it has minimal influence over the peripheral European countries, whose economies and currencies are directly linked to Germany's. Euroskeptical parties such as France's National Front and the newly established Alternative for Germany have praised Cameron's stance on the European Union, but the popularity of those parties within their respective country has more to do with the domestic economic situation than with the United Kingdom's negotiations with Brussels.
Like the United Kingdom, Germany has used the European Union to accomplish larger goals. In the past 70 years, Berlin has sought to expand its political and economic pre-eminence, particularly in the North European Plain — Europe's traditional battleground — by consolidating its alliance with France and creating the European Union's common market and currency union.
From Germany's perspective, it is important that the United Kingdom remain within the European Union for strategic reasons. Were the United Kingdom to leave the bloc, other countries — particularly the Nordic countries, which have a close political relationship with London — could follow. Germany also sees the United Kingdom as an ally against the interests of Mediterranean Europe, especially France. For example, during recent negotiations on the EU budget, London and Berlin pushed for a smaller, more efficient budget, while peripheral countries sought more spending in subsidies and cohesion funds. The German and British governments also agree on the need to deepen the European common market and to reach free trade agreements with other economic powers, such as the United States and Japan.
The problem for Germany is that it will need to make substantial political and economic concessions to the periphery if it wants to keep the eurozone alive. The longer the unemployment crisis in Europe lingers, the greater the periphery's resistance to Germany's leadership will be — independently of London's diplomatic push for EU reform.
In the long run, the United Kingdom's and Germany's strategies are irreconcilable. As a result, London and Berlin will continue pursuing opposing goals, even if some agreements are reached in the short term.