SEEN from Britain, most Europeans are neighbours, but the French are family. Not close family, perhaps, but cousins—viewed with exasperation, distrust, superiority and yet (deep down) gnawing envy. France is where abroad begins. No other country offers such a perfect yardstick for comparison, involving near-identical levels of national wealth, population, military clout, diplomatic cunning and historical swagger. It has long made for a satisfying rivalry, marred by a nagging fear: that the contest matters more to the British than to the French.

There matters might have stayed, if only the world did not keep evolving so alarmingly. A cosy competition is being transformed in opposing directions: one promising, one ominous.

First, the promising. On December 2nd David Cameron was due in Paris for bilateral talks with the French president, Nicolas Sarkozy. When it comes to foreign policy and defence, the Franco-British alliance is in remarkable shape. In London and Paris senior figures reach spontaneously for the same phrase: co-operation is the best “since the second world war”. In the UN Security Council, where France and Britain argued bitterly over invading Iraq, the pair work closely on such tough dossiers as Iran or Syria. In a 2010 defence treaty, the two countries vowed to co-operate on everything from aircraft carriers to what an official calls “the core of the core”: nuclear-weapons research. Then came Libya—an early test of those paper promises. It was a risky mission, it is stressed in Paris. Its success makes Mr Sarkozy and Mr Cameron “brothers-in-arms”.

Talk is cheap. But Britain and France face real, expensive facts. They are midsized countries clinging to the military and diplomatic infrastructure of larger powers. Used cleverly, those assets still offer global influence. Neither can manage that alone.

France long dreamed of using the EU for military leverage, in preference to American-dominated NATO. Other Europeans dashed that dream. Between them, Britain and France account for nearly half of all EU defence spending. But the British will not join a “Europe of defence”, or a mooted EU defence headquarters. The Germans spend money on kit, but mostly will not use it. When Germany abstained rather than endorsing Libyan action at the UN, it was a bitter blow to the French.

French diplomats initially opposed Libyan action under a NATO flag, saying it would be seen as a “crusade” in the Arab world. They called this a “red line”. Britain, backed by a rather disengaged America (and some European allies wary of French bullying), insisted on NATO leadership. The upside of President Sarkozy's pragmatic-yet-impetuous personality came into play. Mr Sarkozy, who led France back into NATO's military structures soon after taking office, overruled his own officials, and the Libyan mission was run from a NATO base near Naples. Mr Cameron has his own pragmatic streak, allies say. The downside of Mr Sarkozy's character surfaced over Libya, as he pushed for quick results or called grandstanding councils of war in Paris. Mr Cameron pushed back when needed, but left the glory to his colleague.

One can quibble about the promise. For instance, a lack of money will limit joint military ambitions even now that the political will exists. But neither country is ready to quit the global stage: as long as that is so, Mr Cameron and Mr Sarkozy believe their two countries are indispensable to each other.

Now for the ominous side of the relationship. It involves the crisis in the euro zone and pits the same two leaders against each other. France sees a strong Europe as a lever of influence. Disliking the enlarged EU of 27 countries (in which its clout is diluted), France wants to use the euro crisis to deepen integration around a core of countries that use the euro, under the political control of a handful of big national leaders. To comfort French voters, Mr Sarkozy has started talking up euro-zone integration as a shield against globalisation and bullying by financial markets.

Today's unprecedentedly Eurosceptic Conservative Party sees a strong Europe mostly as a threat to Britain's global leverage. Mr Cameron says he supports deeper integration within the euro zone, as long as Britain does not have to pay, loses no sovereignty and yet is not marginalised. That is not enough for Tory MPs. They want the prime minister to use changes in the EU's architecture to secure concessions, such as opt-outs from European employment law or EU rules that harm the City of London.

French sources call it “totally unacceptable” to allow British banks to set up in deregulated competition just across the Channel. Britain wants rights of oversight over the euro zone, it is said in Paris: well, the euro zone needs oversight over the City of London. If Britain seeks to “profit” from the crisis, then rule changes can be agreed by countries that use the euro, excluding Britain.

Mutual suspicions seethe. The French were incensed when the chancellor of the exchequer, George Osborne, said on November 14th that financial markets were “asking questions about France”, alongside Greece and Spain. British sources say Mr Osborne was just justifying austerity plans and accuse the French of “spiteful” plans to regulate the City of London.

The best of times, the worst of times

A change of French president in elections next May would bring no comfort. Pierre Moscovici, the Socialist Party's campaign chief, says the current crisis must be solved by Europe doing “more, not less” to protect employment rights. He also challenges British calls for an EU budget frozen in real terms.

The same force explains all aspects of Franco-British relations: a yearning by two established powers to preserve national greatness. In defence, this is working wonders. In the EU, a dangerous clash looms. Doomed by character, proximity and shared ambition, neither country has much room for manoeuvre at all.

Economist.com/blogs/bagehot