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"They haven't grasped what they have to do in terms of restructuring and recapitalising the banks," said Charles Grant, director of the Centre for European Reform, a research institute. "They are behind the markets. Public opinion in Ireland and Greece on the one hand, and Germany and Netherlands on the other, is going in incompatible directions," Mr Grant said. "There may be a time when, even if politicians want to do the right things for the euro, public opinion will not allow them to."

Charles Grant, director of London-based think-tank the Centre for European Reform, told Jane's: "I think the French genuinely hope to get contracts out of it [Lifting the EU arms embargo on China]. They've had an arms export driven foreign policy for years." UK policy on the EU ban "has gone back and forth", he added. The US remains "the key" to any future change in EU policy, according to Grant: "There's no chance of it being lifted in the near future because the Americans don't want it to be.

"The EU policies just aren't mature enough or aligned enough to absorb this kind of crisis," says Hugo Brady of the Centre for European Reform, a think-tank in London. "They're still in learning mode. The Europeans can't find a common line on Russia, so I don't find it so hard to believe they can't find a common line on Libya," said Brady. "Everybody takes their stand, then the event actually happens, then the EU cobbles together a policy based on the country's version that was most right, But the first principle of their action should be like the Hippocratic oath: first do no harm.

"One of the most potentially damaging things is the impact on the balance of economic philosophy within the Eurogroup," said Charles Grant, director of the Centre for European Reform. "Without Britain, Sweden, Denmark or Poland, the whole thing will become more corporatist. Cameron is probably learning that he has got to work through Europe on a lot of issues, for example to reform the EU neighbourhood policy towards north Africa," Grant said. "But the risk is that you get a Britain that is half in and half out of the EU.

Clara Marina O'Donnell, a research fellow at the Centre for European Reform, says European defence capabilities have actually been diminished since they took part in NATO's 1995 bombing campaign in Bosnia. "Europeans would be not be prepared for any intervention in Libya now. They cannot deliver on action. In fact, Europe could [probably] not do Bosnia again", she says.

"We are in a moment of maximum danger on that," said Hugo Brady, senior research fellow at the Centre for European Reform. "We are hamstrung in the language of Brussels because we are askers and in the logic of Brussels askers have to give something."

David Cameron, Britain’s prime minister, has been warned by his coalition allies that he risks side-lining Britain in a two-speed Europe if he adopts an “empty chair” policy while eurozone countries led by France and Germany take key economic decisions - Charles Grant, director of the Centre for European Reform, argues: "You do lose influence if you're not in the room. We have a strong interest in making sure we have a say and influence decisions."

"Euroscepticism is a political force waiting to take off in Ireland," said Hugo Brady, senior research fellow at the Centre for European Reform. "Irish pro-Europeanism was always a very fickle political force and the version we had has run its course. If the country was seen to be forced to raise the corporation tax I am almost positive that one of the (mainstream) parties would go euro sceptic Ireland's relationship with the EU went through a child-like, puppy-love phase," said Brady.

"There are many, many other ways for individual countries and the EU to influence change in our neighbourhood," said Charles Grant, director of the Centre for European Reform in London. "But at the end of the day, if events in the Middle East have taught us anything, it is that Europe has to stick to its values and encourage civil society."