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.
Charles Grant, director of the London-based Centre for European Reform, says this is a chance for the EU to offer parts of the Arab world more money, markets and mobility — but to tie those benefits to progress on democracy and human rights. "If the EU wants to influence its neighbours it will need to increase its offer to them. What should be clear in the new neighbourhood policy, however, is that only countries which reform their political systems will enjoy the closest relations with the EU."
"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.
"The competitiveness pact as it stands is largely meaningless, it's beside the point right now," said Simon Tilford, chief economist of the Centre for European Reform, a London-based think-tank. "The immediate issue is debt restructuring and bank recapitalisation and they're not dealing with that. The wiggle room, the political room for manoeuvre on the part of the Germans, is worryingly limited," said Tilford.
"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.
"In the short term, the existential threat is the financial crisis. Dealing with that will have to involve reducing the debt burden on the three small states [Greece, Ireland and Portugal], and moving to recapitalise the banks in the periphery, and in the core", says Simon Tilford, chief economist at the Centre for European Reform.
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.
In fact, said Philip Whyte of the Centre for European Reform, "the word competitiveness seems to have become a substitute for that of imbalance." It is the eurozone's imbalances — the big current-account surpluses run by Germany and the other core economies and the big deficits being run by the peripheral economies — that he sees at the root of the eurozone's problems.
"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."
"The European Union has been struggling to find an appropriate policy to apply to North Africa and the Middle East," said Clara O'Donnell of the Centre for European Reform. "We are really at a point where there will be lots of difficult questions and I think right now the EU is clearly uncertain how it's going to address them." ..."There is a risk that things go very badly," said O'Donnell.
"C’est bien là la cause de toutes les difficultés qu’auront ensuite la Grande-Bretagne et l’Europe à accorder leurs violons", estime Simon Tilford, chef économiste du CER, basé à Londres.
"The impact on growth from changes in the minimum wage comes down to the level at which it is set," said Simon Tilford, chief economist at the CER in London
Simon Tilford of the CER claims the two sides will struggle to open their markets fully to each other’s farm produce. "When they get down to the nitty-gritty, it’s possible that the negotiations will founder on some of the cultural differences between the EU and the US over things such as genetically modified food," says Tilford.
"A referendum looks almost inevitable now but the timeframe is uncertain," says Katinka Barysch, deputy director of the CER in London. She says the debate is already having a negative economic impact: Investors are getting nervous.
“Politics is one of the black swans of the eurozone this year. In Italy we could have political uncertainty, perhaps the return of Silvio Berlusconi. In Spain, we don’t know where the current scandal surrounding the prime minister will go", said Philip Whyte, of the CER
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