“This is quite unacceptable,” the Liberal Democrat leader is supposed to have fumed at the French government.

I don’t know if the French have been chastened by this rebuke, but I think we should urge Nick to relax. Look at the polls. Anyone would think that Nicolas Sarkozy and David Cameron began that summit with a secret meeting, at which they agreed to help boost the other’s domestic ratings. “I’ll bash you if you’ll bash me,” they said. “Our voters will love it!” And hey presto. The Prime Minister takes a principled opposition to plans for a Fiscal Union (FU), and shoots ahead of poor old Ed Miliband in the polls.

Sarkozy bolsters his own election hopes as he launches an ever-popular tirade against les rosbifs and their appalling belief in free markets. It’s win-win. That is the point about the pantomime xenophobia between the French and the British: it is essentially innocent — or more innocent than almost any other form of xenophobia; because in our hearts, au fond, neither side really believes it. We have to admit there are times when we enjoy a good old orgy of gratuitous Frog-bashing. There are times when we are all prepared to read how our continental cousins are a bunch of garlic-breathing Strauss-Kahns with a deeply suspect interest in structuralism and gloomy films. In this stereotypical world, their women fail to shave their armpits, they have a weird obsession with suppositories and a fanatical lust to eat our children’s ponies.

As for the French view of the British, I am afraid that there are times when they can be heard to say that we have terrible food, that we prefer hot water bottles to sexual intercourse and that most of the men in our ruling class (this was a tart observation by former prime minister Edith Cresson) were not the marrying kind. This is the kind of cheerful abuse that we have been directing at each other for generations, and ever since the battle of Waterloo it has not been meant very seriously.

Deep down, all reasonable English people know that the French have an extraordinary culture, that their understanding of cheese-making is god-given, that they have high-speed trains of a kind we are still trying to imitate and that it is a shame that we (and our children) are so feeble in our mastery of their beautiful language. You can tell that the British secretly love and admire the French by the sheer numbers who go to France for their holidays, and who make their homes in the Dordogne.

As for the French, they know in their hearts that for all the 20th-century misunderstandings between us — Verdun, Mers-el-Kebir, Suez, de Gaulle’s “non” — we remain indispensable allies; and all civilised French people understand that we also have our good points: humour, gardens, custard, pubs, democracy, the theatre and everything else that makes this country great. That is why so many hundreds of thousands of French people have moved to England in the past 20 years, and that is why London is now the sixth or seventh biggest French city on Earth. In fact, there are now so many talented French people living in the English capital that a special MP has just been appointed for outre-manche.

Victor Hugo said something about how the French and the English needed each other, because they both did well from the competition — and he was right. And the final reason to be cool about the gall of Gaul is, of course, that we are not the real object of French wrath. It isn’t Britain whose dithering is causing the continuing and growing uncertainty over the euro. Downing Street is not responsible for the failure to reassure the markets with a credible plan to guarantee the sovereign debt of the peripheral euro nations.

The French are really disappointed with Germany; and it is a golden rule of European politics that when France is angry with Germany, Britain gets the blame. That is because a rant against Germany is a very different thing, with a much heavier charge. Sixty-seven years after the war, the French are facing up to the reality that the European experiment has failed to contain German economic might, and that the Germans are unwilling and unable to help other countries cope with the agony of the euro.

That is what is really making them angry — but that is taboo. Much better to chuck a cow at les anglais.

No, they aren’t really angry with us for opposing the new Treaty for Fiscal Union. The reason our brother and sister Europeans are so chronically enraged with the British is that we have been proved completely right about the euro. For more than 20 years, British ministers have been coming out to Brussels and saying that they just love all this single-market stuff, but that they doubt the wisdom of trying to create a monetary union. And for more than 20 years, some of us have been saying that the reason a monetary union won’t work is that you can’t do it without a political union – and that a political union is not democratically possible.

We warned that you would need a kind of central Euro-government to control national budgets and taxation, and that the peoples of Europe wouldn’t wear it. Now look. It wasn’t the Anglo-Saxon bankers who caused the trouble in the eurozone, Sarkozy mon ami. It was the utter failure of the eurozone countries – starting with France, incidentally – to observe the Maastricht rules. It was the refusal of the Greeks to control their spending or to reform their social security systems. In Greece and Italy, the democratic leaders have been effectively deposed in the hope of appeasing the markets and saving the euro; and what makes the leaders of the eurozone countries even more furious is that it doesn’t seem to be working.

They blame David Cameron for “vetoing” a new EU treaty, when really he has done no such thing. It is perfectly open to the other EU countries now to go ahead and form their own new fiscal rules. If they want, they can decide to create an economic government of Europe. They may decide that now is the time – even though electorates are already feeling alienated from the political process – to hand sensitive decisions on tax and spending to unelected bureaucrats. It strikes me that this would be an amazingly dangerous thing to do, since the peoples of this Supra National And Fiscal Union (Snafu) would rapidly discover that they could no longer remove their government from office. I doubt very much that it would work, since there seems no particular reason why national governments should respect a collection of new “binding” rules any more than they respected the “binding” rules of Maastricht – not unless there is some secret proposal to enforce them by violence with a Euro-army.

But even if the Snafu has little prospect of success, there is no reason for David Cameron to commit this country to a project that is intellectually, morally and democratically bankrupt. He was quite right to say that Britain would not participate; and the reason the others are angry with Britain is that the row conceals the real failure of the summit – and that is to come up with a solution for the problems of the euro. The best hope now is for everyone to cool off and look at the things that the citizens of Europe actually want from their institutions. The euro may or may not be saved – though it seems unlikely that it will still exist in exactly its current form a year from now, and the best thing would be if the Greeks (and perhaps others) were allowed an orderly exit from their pain.

But there are still plenty of things that the European Union could provide its struggling peoples. In January, it will be 20 years since the dawn of the “single market”, and yet there are still all kinds of non-tariff barriers to trade. Here we are trying to create an economic government of Europe, and yet we haven’t even passed the services directive, which would allow everyone from opticians to estate agents to insurance brokers to set up more freely in other European jurisdictions. We are telling the Greeks that Brussels must effectively run their economy – and yet we can’t even agree on a common European standard for plugs.

Everyone is now worried that other European countries will “punish” Britain, perhaps with new directives on financial services designed to damage the City of London. Well, in so far as that is a problem, it is not a problem that has been made any worse by this summit; and in so far as we need to assert our European credentials, now is the time to set out a positive vision for a Europe that actually helps individuals and businesses. Next time these leaders have a summit, let’s lock them in until they agree the services directive and come up with a Europlug.

I was standing beneath my car the other day, and as I looked up I felt awe and pride. As I inspected its miraculously unrusted underbelly, I asked myself once again why people are so darned rude. This is a machine that has done about 120,000 miles. It is rained upon and snowed upon and sometimes towed from bogs. It has attained the ripe old age of 16 — and if you reckon that every car year is the equivalent of seven human years, then this vehicle long ago received its telegram from the Queen. And still it goes like a train. It always starts first time. It never misfires and its exhaust is perfectly acceptable — as pale and wispy as the breath of an elderly monk doing physical jerks in the cloisters before Christmas lunch.

It can carry eight adults effortlessly up Highgate Hill; and yes, it is true that it did start to make a noise a bit like a wounded Spitfire, and that was why it was necessary — for the first time in its life — to take it into the garage, winch it up to head height, and inspect its nether regions. You know what the problem turned out to be? A nut had come loose on the exhaust. That was it. After 16 years of blameless service, one nut had come loose. The problem was so trivial the mechanic could hardly bear to charge me.

Amid yells of appreciation from his audience, he bombs them, burns them and fires them off Beachy Head with a trebuchet; and so the country is conditioned to hunger for newer models. With his brilliant meditations on “torque” and “grunt” and “handling”, he invents personalities and virtues for these inanimate objects. He collaborates with the manufacturers to feed the myth, that if we buy these cars then something of their individual style and ethos will rub off on us. He is the mastermind of the entire superstition that persuades people to trade in their indefatigable old bangers and spend their cash on a new car; and he is, of course, indispensable to the economy and to the livelihoods of some of the poorest and hardest-working people in the country.

We are going through a soul-searching time, when capitalism is deemed to have “failed”, or at least to have been gravely deficient. Around St Paul’s and elsewhere there are good people – many of them too young to remember the command socialism of the Soviet bloc – who wonder about an alternative. They hope for a different world, in which we are not all addicted to “growth” and “profit”, and in which we might be happy with things we need rather than things we want. They imagine a society in which brands no longer have their awful cachet, and in which one family no longer imagines that they are somehow superior to another because they have a swankier house or a flashier car.

I can see why they feel this, can’t you? In these tough times I reckon many of us have a generalised horror of the waste and profligacy – public and private – of the bubble years. There is something deep within us that responds to the idea of restraint and simplicity – and on that theme, quite frankly, I am going to run my old car until it dies beneath me. But we must accept that if everyone acted in that way then we would simply be compounding the present economic problems. If people failed to heed the gospel of Clarkson, and failed to buy shiny new cars, then tens of thousands of people in manufacturing and other businesses would be at risk of losing their jobs.

Of course no one really needs a new Jaguar or Range Rover Evoque. People buy these machines because they want to say something about themselves – that something usually being “I am jolly important” or “I am considerably richer than yow”. But if they didn’t take part in this capitalist conspiracy, then we would be taking bread off the tables of families across Britain – a country that is now making more cars than ever before, and which has more independent car manufacturers than any other country on earth. At a time when we are being warned to expect six years of stagnation, we need to get the economy moving: by investing more in infrastructure, by helping young people into work, and by giving businesses and consumers the confidence to spend money when they can.

Until we come up with a better idea, it is the consumerist free-market economy that offers the best hope of generating the taxes that enable us to pay for pensions, welfare and everything else. In that respect Clarkson is not only the king of automotive consumerism; he is helping to pay for the public sector. By goading the nation to lust after new machines, he helps to keep the motor of the economy turning, and if he didn’t exist I am afraid we would have to invent him.