Where next for negotiations with the EU, after last week’s failed summit? Any assessment of prospects going forward must be rooted in an understanding of what happened at the summit.

In some ways, Mr. Cameron carried out a text book negotiation. The rule book says that if the other party to a negotiation will not allow you to get what you need in a negotiation then you should walk away. If the other side is going to be a “user” then walk away rather than being a “loser”.

There is a whiff of cynicism about the EU’s plans for a financial transaction tax which would hit the UK far harder than any other EU state. The UK Government feels this is a deliberate attempt to marginalise London’s role as Europe’s pre-eminent financial centre. David Cameron used the summit to try to engineer a right for the UK to prevent such a tax by requiring unanimity of voting on matters concerning financial services – since the greater fiscal unity proposed by the Eurozone members and which the EU countries were asked to approve might well hasten the arrival of just such a tax. When France and Germany refused to countenance this and made it clear that there was no chance of the UK winning this point, Cameron played his veto card. This must have felt like a better option to Cameron than nodding through a fiscal union treaty without protection for the City, and then having to defend treaty change without a referendum to his howling right wingers.

A closer look at what happened suggests that maybe events could have unfolded differently. It is fine to make a threat in a negotiation (as Cameron did, by threatening to walk away), but if you do then (a) you must be prepared to carry out your threat (as Cameron was) and (b) you need a “Plan B”. There does not so far seem to be a lot of evidence of Plan B.

What lessons can be learned?

1. When planning a negotiation it’s always good to work out in advance what you would do if the deal does not happen.

What is your next best alternative? If you have a Plan B and it’s better than what is on offer then you can afford to walk away from a negotiation. If you don’t have a Plan B, then you need to be careful before you play “take it or leave it”, as otherwise, if the other side says “leave it”, then you may find yourself short of options. This appears to be the position the UK now finds itself in.

2. You have to adapt yourself to the needs and behaviours of the other side if you want to avoid stalemate happening in a negotiation.

Whilst there are many shades of opinion within the EU, there is broad consensus (other than in the UK) about the need to “belong” to that club, and therefore the need to protect it. This need informs most EU negotiations. As a generalisation Britain doesn’t share that “belonging” need – if anything we share a contrary need to maintain our independence. In any negotiation therefore, the EU and Britain are normally only able to make progress insofar as both their mutual needs are being met. It is as though Merkel and Sarkozy are “parental figures” for the EU, avowedly putting “the family” first, whereas the UK is like an unruly teenage child – wanting the benefits of family life but insisting on its independence. Like any parents and teenagers, they need to recognise each other’s needs in order to get along.

3. Individuals need to accommodate the behaviours of others in order to maximise their chances of reaching agreement.

If you match the behaviours and patterns of communication that the other side exhibits, then your communication with them is likely to be much more persuasive, as you will be using the same mechanics as they do to interpret the world. If you are negotiating with Angela Merkel then you have to be conscious of her cool, almost disassociated demeanour, and her relentlessly rational approach to intellectual alignment. If you are negotiating with Nicolas Sarkozy you need to accommodate his passionate and impulsive nature and patterns of behaviour as well as his desire for emotional commitment.

We all tend to default to our natural patterns of behaviour when we negotiate and David Cameron’s natural style is to to be friendly, but to keep options open. This does not suit either Merkel’s desire for commitment through reason or Sarkozy’s predilection for passionate principle. Cameron prefers to keep options and make decisions based on pragmatism. So, overlaying the non-alignment of negotiating needs last week may have been a mis-alignment of negotiating behaviours.

Where to go from here?

The rupture has created a chilly negotiating atmosphere, with Sarkozy and Merkel both questioning Cameron’s good faith at the summit, and the Governor of France’s Central Bank, Christian Noyer, suggesting on Friday a downgrading of the UK’s credit rating. So, how should they go about negotiating a deal from here?

1. It is very difficult to make progress in negotiations where the climate is hostile, so the first step must be to try to normalise that climate through re-engagement between the 3 protagonists – preferably in private and away from the attention of the media.

2. Then there must be a conscious effort to address the negotiating needs on each side – to “fuse” those needs in order to create currency for both sides rather than being trapped into a continued positional negotiation, where only the defence of your own agenda is considered important.

3. Finally these 3 protagonists need to recognise the behavioural traits that each of them has, and work with those patterns of behaviour rather than ignoring them, in a bid to reach agreement.

My feeling is that, like most family rows, this can be resolved. Parents don’t stop loving their children, no matter how difficult they may be, and even difficult teenagers still like the material benefits and emotional security that family life can bring….

There is always another deal to be done, and always a chance to turn around a previous deal failure – if you learn from the previous experience and negotiate differently next time. It emerges that notwithstanding the row last week, the UK will nonetheless be invited to be an “observer” on the fiscal treaty discussions. Maybe that offers an opportunity to negotiate in a different manner going forward, without altering the UK’s core aims…