Continental drift?

To many in Europe, it may seem as if Britain is already taking a hard line on the EU: Over the last few weeks the British prime minister has repeatedly threatened to wield his veto at the forthcoming EU budget talks. He's also talked up the prospects of holding a referendum on Britain's relationship with the EU.

But for many hardcore euroskeptics from within David Cameron's own party, this talk doesn't go far enough. They see the current debate, and the crisis in the eurozone, as an opportunity to set Britain on a path to leave the EU altogether.

On Wednesday night, the government was defeated in a vote in the House of Commons, after more than 50 rebels from Cameron's Conservative Party joined the opposition in supporting a demand for spending cuts in Brussels.

The vote is not binding, but it puts Cameron under intense pressure to act tough on EU budget talks in Brussels later in November.

Increasing skepticism

"This is a classic microwave issue in the UK - it can heat up in a second. And I think that's what's happened," said Mats Persson, director of Open Europe, a London-based think tank calling for EU reform.

"It's a bit of an unfortunate situation," Persson added. "Because the UK public and political classes are growing increasingly skeptical, at exactly the same point that the eurozone is set for more integration. So you can't really freeze the issue of Europe, because the eurozone is moving and that in turn causes questions for Britain."

But Britain's tough stance is ruffling feathers elsewhere in the European Union, notably when it comes to budget proposals. The UK wants to reduce its contribution to the EU as it struggles to reduce its own debt, but countries like Poland, which relies heavily on EU funding for economic development, are angry about UK threats to disrupt budget talks.

"You cannot be a member of a club, agree to pay the fee, and then after entering the club and having the meal, leave without paying," Polish conservative Jacek Saryusz-Wolski, a member of the European Parliament, told DW. "Britain is very willing to profit from the benefits of the single market, from the free movement of trade, of goods and services and capital, and is really very much attached to those privileges. But at the same time it does not understand that the other side of the coin is the solidarity of the budget."

In or out?

Saryusz-Wolski believes that Britain is "drifting away" from the rest of the continent.

By taking such an extreme position, he said, the UK was "ruining every chance for compromise" and causing "despair" in countries in central and eastern Europe, which benefit from the so-called cohesion funds.

"Britain is isolating itself and it will probably later on … regret that," Saryusz-Wolski said.

Many in Europe want Britain to make up its mind sooner rather than later - either to commit to the EU, or to get out altogether. The confusion over Britain's role in the EU, they say, could have a harmful effect on the whole European project.

"I think it is damaging for the UK, but also it's damaging for the European Union itself, because it makes the gap so immense in the middle of this crisis where we need to send signals to the financial markets that we agree, and that we consider the European Union budget as one of the instruments to get the European Union out of the crisis," said Saryusz-Wolski.

British-German relations

A day after Cameron's humiliating defeat in the House of Commons, German Chancellor Angela Merkel issued a veiled reprimand to Britain over threats to veto a deal on the EU budget.

Merkel said it was normal in politics to "stake out terrain" ahead of a summit, but, she added: "I don't want to throw more vetoes into the room; it doesn't help bring about a solution."

The two leaders will meet next week to try to reach a compromise deal over EU budget talks before the summit in Brussels on November 22 and 23.

"I also think that fundamentally they will have to start to discuss a new grand bargain between Berlin and London," said Mats Persson. "I think that Berlin has to realize that just as Merkel has to balance a lot of interests at home, so must Cameron, and it's in both their interests to allow each other to deal with their respective domestic debates in a way that will put their EU memberships on a sustainable footing."