Press

"Europe faces a critical choice between greater integration and disintegration," Simon Tilford, chief economist at the Centre for European Reform think tank, wrote this week. "Unless the reality is brought into line with the rhetoric, the eurozone will unravel."

Charles Grant, with the Centre for European Reform, a pro-EU think tank based in London, told the conference that Europe faces "five years of ghastly crisis of blaming each other and a lack of solidarity… It's going to be brutal and nasty and it will force through harsh, harsh reforms. In 10 years, we will be seeing the benefits of that."

"In many European countries, people believe that parties on the centre-right are more capable of dealing with the economy than the centre-left," said Clara O'Donnell, a research fellow at the Centre for European Reform in London. "They basically seem to believe that the centre-right is more capable of getting through the economic crisis."… "The centre-left has found it very difficult to find a narrative to attract voters," said O'Donnell, the London researcher. "In a lot of countries, the centre-left is in disarray."

New euro states are likely to be less generous in accepting fiscal indiscretions from the bloc's older members, such as Greece, as they demand that the same stringent budget policies that they pushed through in order to join be enforced across the region, according to Katinka Barysch, chief economist at the London-based Centre for European Reform. "As more of these new member states join the single currency they will be very strict on the old member states," Barysch said in an interview with Bloomberg Television today.

Simon Tilford, chief economist at the European Centre for Reform, noted that the plan for the euro included "some elements of the French model" such as a greater need for intervention and regulation…. The French "were very quick to recognize how serious the situation was and that does contrast with one or two other governments, notably Germany." But he added, "I find the rhetoric coming out of France, with its attack on the markets as the reason behind the downfall of the eurozone, quite problematic.

"In this whole area of financial services, UK-EU relations could blow up," according to Philip Whyte, a UK-based analyst from the Centre for European reform. … "The Lib Dems will likely try to reign in Euroscepticism coming from their Conservative partners but they will not be shaping the UK's EU policy." Whyte also points out that the Tory electorate is still smarting from the fact that they did not have a referendum on the EU's Lisbon Treaty last year, serving to fuel their hostility to the bloc even more.

"The problem here is the recurring inability in the European project to say brutal truths honestly and clearly and act on them in a realistic manner," said Hugo Brady, an analyst at the Centre for European Reform, referring to a previous last-minute summit. "Doing just enough to survive the political day is a habit born of EU leaders involved in summitry," he said, adding: "Eventually the EU is going to hit a crisis that it can't get over."

But putting changes into effect that would give the European Commission or other governments real control over national budgets is easier said than done, says Simon Tilford of the Centre for European Reform in London. Governments "are going to say all the right things." … "This isn't an issue that's going to be resolved by one or two governments getting tough on public spending," he says.

"It does not address the underlying issue – the terrible economic growth prospects of the southern eurozone countries and Ireland," said Simon Tilford, chief economist at the Centre for European Reform think tank. "Unless these economies can avoid deflation and get their economies growing, they have no future in the eurozone."