As the crow flies, it’s 320 kilometers (199 miles) between Brussels and London. But at 8 a.m. sharp on Wednesday, when British Prime Minister David Cameron stepped up to the microphone in the basement auditorium of US media company Bloomsberg’s European headquarters on Finsbury Square, the Channel suddenly got a lot wider.

In Brussels, the lack of desire to even react to Cameron’s challenge made itself felt – and if it hadn’t been for loud calls of protest, the spokeswoman for EU Commission president José Manuel Barroso would just as soon have broken up the midday press conference after delivering three succinct statements.

But the fact is that -- even if both sides affirm that they don’t want to pull up the drawbridge -- Wednesday's speech put two questions out there front and center: Can there be a European Union without the British? And can the British manage without the EU?

The clear answer to both questions is: Yes. Of course they can manage without each other. Whether they would manage better is another issue. None of the 27 and soon to be 28 (Croatia) EU countries – not even the French – want Britain to leave. Brussels is a bazaar, and at the negotiating table the British are heavyweights that others happily align with.

A case in point is the EU 2014-2020 budget, which an alliance of countries led by London and Berlin recently rejected much to the anger of many Brussels functionaries and parliamentarians. The British and Germans were also long-time partners on environmental issues.

Northern European countries align with Britain when it comes to Commission involvement in the labor market, for example in opposing quotas for women on boards. Britain is also a powerful advocate for all those who favor EU enlargement.

And of course the vision of a European Defence Community without Britain is a paper tiger. "London has to be part of any joint European foreign and security policies if they are to be taken seriously," Alexander Graf Lambsdorff, a European Parliament member from Germany's Free Democratic Party, told Die Welt.

Fate of The City

However, even before the outbreak of the crisis such visions had moved to the bottom of the agenda. And what with the challenge of ensuring that their joint currency has a solid future, the euro-zone countries have other more important things on their plate right now than going over dozens of agreements with Cameron’s people.

"Renegotiating contracts that London signed is an illusion," German Christian Democratic Union politician Gunther Krichbaum, who chairs the German Parliament’s Committee on  European Union affairs, told Die Welt. "All the other states would have something they wanted to renegotiate too and at the end of the day you would have the same compromises."

If London really does decided to push for an ultimate confrontation, draw the consequences and pull out of the Union, what it loses – access to the largest market in the world, with 500 million consumers -- would be far greater than what it gains. And in a free-trade zone, the British would have to accept rules they had no hand in creating.

A "Brexit" might not shatter the Union – but Britain itself just might end up shattered: in 2014, the Scots, will be voting for their independence, and some may be more inclined to separate from the UK, if it is leaving Europe. If that were the case, Cameron would have burned both hands with his referendums.

Just how serious leaving the EU would be for the British economy is something economists and business folk disagree on. However the fact is that half of the country’s exports go to EU member states and some 3 million jobs depend on it. The common market is hugely important for Britain, indeed Cameron stressed that in his speech.

However, there is the possibility for the UK to hammer out a free trade agreement with the EU as the Swiss have done. Last fall, a study conducted by the Institute of Economic Affairs, the London-based free market think tank, concluded that that option would mean that leaving the EU would only cost Britain one percent of its GDP.

Still, British companies and business associations are worried about the country’s current tendency to cut itself off. And rightly so: many multinationals use Britain as a base from which to drive continental business. With the British out of the Union, these firms might soon be moving their headquarters to Dublin, Frankfurt or Paris.

London as a financial hub would without a doubt take the biggest hit. Said Chris Cummings, Chief Executive of TheCityUK, an influential lobbyist from the London financial industry, after Cameron’s speech: “Our recent Competitiveness Report found that 40% of financial services firms choose the UK as a place to set up and grow their business because of our access to the EU.” In this sector particularly firms are very mobile and would not hesitate to move.

Tom Brown, head of the loans department at the Norddeutsche Landesbank in London, is even more direct. "Without the EU, London as a financial hub would be reduced to a fraction of the size it is now," he said, adding that the reason London grew to become Europe’s largest banking center was because Britain joined the EU. "Without the possibility to move offices and workers freely around the EU, the City would be washed up."