Press

He may even push for a restructuring of the rest of Greek debt. But it will be a hard sell, and Mr Hollande has to be careful, notes Charles Grant, director of the CER. "If Hollande tried to gang up with, say, Italy and Spain, to force Germany into a complete U-turn, he would fail ...

Although Labour has never ruled out a plebiscite, Mr Balls's comments at a Centre for European Reform debate surprised senior colleagues who had agreed not to speculate on the subject. Mr Balls said there were questions about "whether there could be a case for there being a referendum more widely on Britain's relationship with Europe as a new settlement evolves". He added: "That might be an issue whose time comes, that might be. But I don't think it’s now."

"Merkel will find it hard to resist them all," said Charles Grant, director of the Centre for European Reform in London.

Lord Mandelson also joined Mr Balls on the platform of a Centre for European Reform event and praised the shadow chancellor for his "prescient" speech two years ago at Bloomberg in which he warned of the dangers of sucking demand out of the economy as a storm approached.

"If Greece moves towards exiting the euro ... the EU would then need to enlarge its bailout funds and prepare other emergency measures," said Charles Grant, director of the CER. ... "They should tell the Greeks that if they wish to stay in the euro they cannot avoid austerity and structural reform ... But to raise the Greeks' morale the EU will have to relax Greece's deficit reduction targets, write off much more Greek debt and think more imaginatively about how to encourage external investment in Greece. Merkel will find such policies harder to embrace than Hollande."

On Monday when Lord Mandelson appears alongside his one-time political foe Ed Balls, shadow chancellor, at a CER event. Both men are expected to share a common critique that David Cameron has left Britain marginalised in Europe and that he should be helping to forge a growth strategy at an EU level.

"Through Ukraine's dependence on Russian gas, Moscow always has this weapon to bring Kiev to heel if it, say, tries to move closer to Europe," said Katinka Barysch, deputy director of the CER. "If that stranglehold no longer existed, Ukraine would have more freedom to choose its own path."

“We might still have a government where mainstream political forces account for the majority, but unless they can arrest the implosion of the Greek economy, I don’t think they will be in power for very long,” said Simon Tilford of the CER.
 

"Hollande makes an awful lot of sense when he talks about the need for less austere, less restrictive fiscal policies, but his credibility is much undermined when he talks about reversing the increases in the retirement age or increasing the minimal wage by a huge amount," said Simon Tilford, of the CER.