Press

Simon Tilford, chief economist at the Centre for European Reform, said that France and Germany recognised that some form of bailout was inevitable. But, he said, for a bailout to be sold to a skeptical German public, the Greeks first "have to be seen to be suffering."

At a weekend conference discussing the lessons from the economic crisis, as much time was devoted to the prospect of Germany leaving the euro zone as there was to the "peripheral" countries of Greece, Portugal or Spain abandoning it. The conference of prominent economists, current and former officials and others was held at Ditchley Park, a stately home in the English countryside. To be sure, nobody was predicting any such exit is likely, certainly not in the short term.

The "underlying assumption", writes Katinka Barysch in a new paper for the Centre for European Reform, a London-based think-tank, is that EU capital, technology and training might make Russia "more Western-oriented, open and easier to deal with."

"Denied the protection of NATO's nuclear weapons in Europe, Turkey would have additional reasons to worry about Iran's nuclear programme – and perhaps to develop nuclear weapons of its own. Newer NATO members in central Europe, who see in the nuclear weapons a symbol of US commitment to defend them, would be left feeling vulnerable," George Robertson, a former defence secretary and NATO secretary general, argued in an article he co-authored this month for the Centre for European Reform.

Supporters of the treaty argue that it was never going to deliver instant results. "It is difficult," said Charles Grant, director of the Centre for European Reform, "to write off what has not been built," referring the new European diplomatic corps. "Turf wars are a characteristic of bureaucracies since 10,000 years BC," he said. "Bureaucracies fight other bureaucracies. Everyone knew this would happen."

Simon Tilford, chief economist at the Centre for European Reform in London, said that for the eurozone countries the Eurostat proposals constituted "a significant erosion of sovereignty. "But when they signed up to the eurozone, they effectively agreed to cede sovereignty over time", Mr Tilford said. "There was always going to have to be a greater measure of integration." Although the Greek situation was "the most egregious example," he added, "it is not as if there have been no other examples of governments massaging public finances."

Mr Kontopirakis "alone is not guilty, but he should have spotted the discrepancy and spoken up at the time," said Simon Tilford, chief economist at the London-based Centre for European Reform. He continued: "No doubt, there was political interference at the statistics office, but his argument is indefensible. This is the most egregious example of budgetary data that we have ever seen in the EU, and his position is extremely weak."

"What they've basically done is say they will help Greece if it meets the terms of the plan to cut its deficit, but if it managed to do that, Greece wouldn't need any help," said Simon Tilford, chief economist at the Centre for European Reform. "I certainly think they will come up with something more substantial. But today demonstrates that we may need a full-blown crisis in Greece before they are prepared to put money on the table."