Angela Merkel's warning to David Cameron that freedom of movement is "non-negotiable", hugely increases the chances of Britain leaving the EU, something that would have massive implications for us here in Ireland.
Britain has always been a reluctant member of the EU. Ever since it refused to sign the 1957 Treaty of Rome, which founded the then European Economic Community, Britain has had an ambiguous relationship with the European project.
Even when Britain did eventually join the EEC in 1973 it did so with considerable bad grace. However, it was Britain's ignominious ejection from the European exchange rate mechanism in September 1992 that finally transformed Britain's relationship with Europe from being occasionally awkward to being downright toxic.
A young David Cameron was a special adviser to the then UK Chancellor of the Exchequer, Norman Lamont, and can be seen standing behind his boss as Mr Lamont announced Britain's "temporary" withdrawal from the ERM.
By comparison, Ireland's European experience, at least until our banks went bust, has been utterly different to that of our nearest neighbour.
Since 1973, we have come out from under Britain's shadow. Average Irish incomes have risen from just two-thirds of the European average to more than 100pc.
Even after the post-Celtic Tiger bust, Ireland is still one of the wealthier European countries.
Unfortunately, there has always been a contradiction at the very heart of Ireland's EU membership. While the proportion of Ireland's exports going to the UK has fallen from almost 90pc in the early 1970s to just 18pc today, the official trade statistics understate our true dependence on the British market. This is because a much higher proportion of our indigenous exports, which consume a far higher proportion of Irish goods and services than multinational exports, go to the UK.
This means that, ever since 1973, we have been trying to ride two economic horses simultaneously.
When the UK and the rest of Europe diverged, the consequences for this country have been extremely painful, as when we were forced to devalue in January 1993 following Britain's ejection from the ERM. Britain's difficult relationship with Europe has dragged on for so long that it would be easy to be lulled into a false sense of security believing that, when push came to shove, the UK would stay in. It might not be a good idea to bet on it.
The continuing difficulties of the euro could bring matters to a head.
While ECB president Mario Draghi has eased market fears for now, the design flaws of the single currency remain. A fresh Eurozone crisis could erupt at any time.
France is the most likely location of any fresh Eurozone crisis. Opinion polls show Marine le Pen, the leader of the far-right National Front is favourite to win the next French presidential election, which is due to take place in May 2017 - just when David Cameron has promised British voters a referendum on EU membership.
What are the chances of Britain voting to stay in the EU if Marine le Pen, who has vowed to pull France out of the euro and restore the franc on her first day in office, is elected?
Now, Angela Merkel, who has up to now been seen as being sympathetic to Britain, is laying down the law.
She has warned Mr Cameron that freedom of movement was a "non-negotiable" condition of Britain's continuing membership of the EU.
Suddenly the possibility of a British exit from Europe is a very real one. This would be a huge crisis for this country.
Do we stay with Europe or leave along with the UK?.
What happens if a future President le Pen pulls France out of the euro? Has the government made any contingency plans?
Compared with these momentous issues, the level of water charges or the future ownership of Irish Water pale into insignificance.