I think the problem is not in the current composition (aside from the occasional unreasonable children's balloon regulation and what not), but the fact that, as the prolonged EU fiscal crisis continues, the German response has been to attempt to aggregate ever greater powers to the EU in an attempt to exercise a level of control and oversight over Greek, Italian, Spanish, Irish and (some day) even French budget problems. While some of their proposed "solutions" are euro-specific, others aren't. If I remember correctly, Merkel was unhappy that the UK didn't agree to a financial transactions tax.

Sitting here in NY, I would have loved to see that because some of the financial industry fleeing the City of London would come here (the respectable portion; the seedier stuff is going to more opaque markets anyway). However, the UK was right in realizing that a tax of that sort would kill London finance, which is really most of what the UK has these days (and sadly, finance is propping up much of the US, though it's not as bad as in the UK).

I agree that Cameron is doing the smart thing. By threatening to leave, he lets the Germans know how serious he is that the UK needs to retain its privileges (or, rather, let Europe remain a smorgasbord to a certain degree, as Merkel said it shouldn't).

If I had to choose between the EU and the financial services industry in London, though, I'd choose the second in a heartbeat.