Press

"The EU-Russia relationship is completely stuck, and the Americans are looking for something to continue the goodwill created by the [Obama's administration's] reset," said Katinka Barysch of the CER.

Economist Simon Tilford at the CER in London said the currency bloc will not straighten out its problems "unless they do something about trade imbalances within the eurozone, which at the moment are primary causes of the very big budget deficits in places like Spain."

Charles Grant of the CER puts it down to history and geography: we alone in Europe had a good war, and our island made us wider traders than other countries, but even so half our trade is with the EU.

But Charles Grant of the CER said: "That may be the case, and 50 per cent of people want more sunny days, but I really don't believe it is top of people's priorities."

"Europe is staring at a lost decade," says Simon Tilford, chief economist at the CER. Years of economic stagnation with persistent fears of sovereign and banking-sector defaults "will have a considerable impact on the broader international economy," he says.

Hugo Brady, a research fellow at the CER, explains, "Immigration policy has always been a problem in the EU. It's never been centralised and countries examine border control at a national level."

Governments will probably scrutinise the proposed budget more carefully than when Galileo was first conceived over a decade ago because of concern over the economy, said Tomas Valasek, director of foreign policy and defence at the CER in London. Still, the project probably won’t be shut down, and enough funding will be approved to keep staff employed and provide a minimal return for the manufacturers, he said. “They’ve already poured so much money into it ... Galileo has already benefited from previously unplanned allocations from the European Commission budget.”

"I don't think they can meet expectations. The summit will fall well, well short of the kind of big bang needed to reassure the markets," said Simon Tilford, chief economist at the CER in London. Tilford fears markets will react badly next week.

“The only thing that can save the euro in its current form can’t and shouldn’t be done without democratic debate and support,” said Simon Tilford, chief economist for the CER, a research institution. “You need to bring the electorate with you,” he said. Of course, he acknowledged, a real democratic debate “could exacerbate the crisis.”