Michael Noonan will be our key figure in Europe during the Irish EU presidency beginning in January and his views about this and about Europe take on a special significance. The looming inevitability of this awesome eventuality in the present circumstances has worried many within the public service, not least those who consider we are not up to the job.

We are failing to grapple properly with a multitude of domestic problems, and to have the burden of a central role in the supposed matter of running Europe casts a huge shadow over our competence. No matter; the task is upon us now and we need desperately, I think, to accommodate ourselves within the reality that faces us, with our own unstable Budget side by side with the breakdown of the EU budget talks last week.

Mr Noonan's views on the Government's objectives for the Irish presidency may be briefly summarised. He sees a political union for Europe, involving a more centralised EU, as inevitable. Well he might, since he and the two parties in power, together with Fianna Fail, have, with might and main, worked to deliver us into that political union well before the need for it has been established.

We are more governed from Europe, and psychologically more conditioned to being so governed, than any other state.

In what would appear to be a contradictory interpretation of the future, he sees difficulties in bringing the rest of the people along – in my view, Ireland is already there – with what he called last week "a deepening of integration". And he went on to identify "budgetary sovereignty" for us and the other 26 EU member states being limited by "integration" but still being there and still having "democratic legitimacy".

We are between the rock of budgetary constraint, imposed by the EU from outside and without democratic debate; and the hard place of not being able to control wages and pensions, raise additional direct taxes, or balance the books. Mr Noonan said "fiscal discipline is not the same as austerity". We have both, and he seems powerless to change this.

There seemed to be a further contradiction in his view that the necessary EU economic governance could be achieved by a "big bang'' approach, yet one that was agreed, not imposed. I admire Mr Noonan's physical and mental resources since he made this relatively optimistic speech on Friday, having almost literally crawled away exhausted from that EU meeting, claiming simply he was "'tired" and making no comment about how it had gone, nor what Ireland had got out of it, which was precisely nothing.

One of the things that was missing from this Friday speech was any reference to the outcome as it affects the UK and Ireland – a crucial issue confronting us and likely to impact on our future more than any other.

The position taken by David Cameron last week represented by far the biggest challenge to all the things Mr Noonan expressed himself favouring on the eve of the Irish presidency.

The British prime minister, together with the German, Dutch and Swedish leaders, were collectively responsible for blocking the EU budget deal, an exercise in precisely the democratic intervention of four powerful net contributors whose delivery of their version of this was directly parallel with what Mr Noonan praised (in the abstract, it must be said) in his speech on Friday.

Mr Cameron was not an isolated figure when he walked away from the summit, but a spokesperson for other democratic states expressing some disgust at what he described as the "insult" of Manuel Barroso refusing to cut even one euro from the extravagantly huge expenditure on running the EU bureaucracy.

The European Commission president needs to be told by Mr Noonan to come back in January with significant cuts in this area if change is to be achieved. One wonders if this exercise in democracy will materialise when we take over? Will Mr Noonan have such nerve?

Far more important for Mr Cameron, however, was the fact that he walked away from the collapsed EU budget summit as part of an inner team of crucial importance – those who pay the piper – and not isolated, as many anticipated he would be. He is in a position to face his own party at home having protected British interests, having delivered a much-needed rap over the knuckles to Mr Barroso, who has irritated many other EU leaders, and having strengthened the British position for a re-negotiation with the EU rather than a departure from it.

If Ireland still thinks at all of its vital interests, politically and in economic and trade terms, then what is happening in Britain is food for thought and, in the case of Mr Noonan, requires careful recognition of Britain's dilemma.

As Peter Oborne put it in the 'Daily Telegraph' last week: "The majority of Conservative MPs now want a renegotiation of the European treaties, a repatriation of powers and – if that cannot be satisfactorily arranged – then a referendum on British membership.' (In such a referendum the pro-Europeans would, in his view, win.)

Mr Cameron judged things well last week. Most importantly, he avoided confrontation with the European Union while at the same time forming bonds with the more powerful grouping of net contributors. What was held in abeyance was the north-south problem and the marginal role into which the French president was pushed.

The relationship between ourselves and Britain should be based on trust and friendship.

This needs reference points. It is not widely enough debated, as the past few days have shown; and it involves another vital interest of ours – the future of Irish north-south relations in the event of the UK being forced into a withdrawal from the EU, either as a result of EU impatience or of Conservative intolerance.

This at-present unlikely option would impact on Scotland, on Northern Ireland and ourselves, on the United States and on our relationship with Europe and with Britain, both Scotland and Northern Ireland remaining important in their impact on us, though becoming far more complex and difficult.

The present Government pays little attention to all of this – no different from the previous governments under Brian Cowen and Bertie Ahern.