Britain's role is to act as referee within this fragmented Europe

One can almost hear the sound of the Eurosceptics sharpening their pencils in expectation of the outcome of today's meeting in Berlin between the German Chancellor and the French President. Days after the French Non to the constitution left the European Union looking weakened, the tête-à-tête will create a sense of foreboding that these two wounded leaders are about to try to regain the initiative. The worry is that they will try to escape their problems by pandering to their nations' most atavistic fears about globalisation, free markets and everything else almost summed up by the absurd phrase, the "Anglo-Saxon agenda".

One can almost hear the sound of the Eurosceptics sharpening their pencils in expectation of the outcome of today's meeting in Berlin between the German Chancellor and the French President. Days after the French Non to the constitution left the European Union looking weakened, the tête-à-tête will create a sense of foreboding that these two wounded leaders are about to try to regain the initiative. The worry is that they will try to escape their problems by pandering to their nations' most atavistic fears about globalisation, free markets and everything else almost summed up by the absurd phrase, the "Anglo-Saxon agenda".

A dismal scenario unfolds in which Jacques Chirac, a man happy to bend with the political wind and rattled by the anti-globalist mood in France, persuades Germany to lock itself into an "inner core" within the European Union. Powerful circles in France are contemplating such a realignment, which would see a clutch of countries under French leadership closing ranks against free trade and economic reform and rallying to everything the British detest most, starting with bloated subsidies, high tax and protection.

From a practical angle, the formation of such an inner core within Europe still looks unlikely. It may tempt Mr Chirac as a means to reassert France's threatened leadership in Europe, but his German partner may not remain in office long enough to see it through. Under Mr Schröder's potential successor, the Christian Democrat Angela Merkel, Germany may turn closer to its booming eastern neighbour, Poland, rather than huddling under the French flank. The Dutch have said they will not join a core group and Silvio Berlusconi sides more with the British than the French on Europe.

But none of the caveats surrounding the hazy project for a "core Europe" mean that we should underplay the scale of the challenge. However unrealistic the notion of a Franco-German-led unit emerging in Europe's heart, a Europe in which several founding members see themselves as the awkward squad is bad news for everyone.

Eurosceptics should put their champagne away. They are wrong to believe that their dreams are about to be realised: a ghost-like Europe with no real institutions and existing only to promote free trade. If France and Germany feel cornered, they are unlikely to roll over and accept that Britain knows best. More likely is a war of attrition against Britain's aims, spelling goodbye to enlargement, the liberation of markets and services and the opening up of world trade.

Tony Blair will have to tread carefully when Britain assumes the presidency of the European Union on 1 July. He ought not to suggest he intends to use his six months in the driving seat to preach to Paris and Berlin on their failings. Indeed, he would be wise to call off his spinners, who are already sounding a triumphant note into sympathetic ears.

If progress is to be made on the British agenda, Mr Blair should remind his partners that the winds of economic change, blowing hard from the Far East, cannot be deflected by a French non, and point out that Europe's structures are seen on the ground as elitist, out of touch and undemocratic. This was, after all, the clear message from the Dutch rejection. At the same time, he must be statesmanlike; Europe is a college, not a contest. He should act more like a referee between the camps than a player, while gradually nudging things in his direction. We need to help France and Germany to get out of their tight corner, rather than take too much advantage of their disarray to score points.